HSBC decided to hire some heavy hitters to beef up its leveraged finance group in the last month or so, at a time when other banks began freezing loans to private equity firms.
  
Focusing on a financial sponsor/lev fin team during a credit crunch seemed questionable at the time. How many deals, after all, would buyout firms pull off in this environment? 
    
The other side of that argument is that private equity folks have around $1 trillion at their disposal, so they’ve got to spend their money somehow, even if it isn’t on Mega-LBOs promising massive fees to banks. Witness TPG’s purchase of Axcan Pharma on Thursday for $1.3 billion — hardly the $20 billion plus deals they chased only a few months back.
  
Who provided debt financing for the deal? HSBC. Bank of America was another lender, with both banks showing that they’re lending desks are open for business at a time when other banks like Citigroup and Merrill Lynch have all but shut theirs. 
     
HSBC and BofA now hope the loans don’t suffer the same fate as other LBOs that found scant buyers, leading to large write-downs across Wall Street. For now, HSBC is happy to be taking an underwriting fee while their banking brethren on Wall Street are twiddling their thumbs until bonus time.