Rising federal funds rate could slow PE HVAC acquisitions

Increases to the federal funds rate could dampen PE activity in HVAC, as PE firms typically borrow at this rate plus a spread. However, rates would need to rise significantly to have a major impact.

“More immediate and likely are increases to the federal funds rate. PE firms usually borrow money at this rate plus a few hundred basis points. The rate currently stands at around.5% after the recent hike. It would have to reach levels not seen since before the financial crisis to have a major impact, Silberstein said.”

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