That's how the economy works! PE companies lend money to the other companies for a stake and then they borrow money from banks by showing their portfolio of investment. That's a very common practice. Even banks do that quite often.
I believe not always, and not as a rule. Because the more logical move is to let them go from their portfolio and not cause the whole company to be at risk. What some of them did is they took MORE risk, which could be good. But in the current state of the company, it could be very bad.
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They lend money to common people, then sells off the loan portfolio to the asset management companies to borrow money against that. Debt over debt over debt - keeps the modern economy rolling!
But do you believe it will never stop with falling liquidity in the system?
Plus lend money to common people? In the context of what's written in that link, I think you and I have a different idea of what private equity companies are?
