I'll give you one thing: the assets of the company are pledged to the senior bond holders, but then after the bonds are sold the PE company generally disposes o

I'll give you one thing: the assets of the company are pledged to the senior bond holders, but then after the bonds are sold the PE company generally disposes of the assets, leaving nothing backing the senior debt. The junior debt, of course, has nothing pledged to back it at all. Junior debt in leveraged buyouts is pure gambling.