The American consumer is not the only part of the US economy that's holding off on spending. So are institutional bond investors.Based on a report from Bloomberg, it looks like Wall Street's premier investment banks -- such as Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS) and JPMorgan Chase (NYSE: JPM) -- are slashing prices on their buyout debt backlog. In fact, some of the discounts are as much as 10% of the face values. Given that Wall Street is going to report horrendous financial results, it makes sense to deal with the problems now, right?

Interestingly enough, Wall Street had some help from failed deals, such as with SLM (NYSE: SLM). Actually, this trend has wiped out $51 billion in obligations.

Yet, there is still much to finance, such as Clear Channel, Harrah's, BCE and Alltel. So, we might also see some post-Christmas buyout bond slashing, as well.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

It looks like the complex $8.2 billion buyout deal for Tribune Co. (NYSE: TRB) is progressing.

This week, the company's shareholders tendered 222 million shares. Keep in mind that Tribune was looking for about 126 million shares. Although, if I was a shareholder, I would want to get out, too.

But there's a problem. The company had to agree to some draconian financing arrangements to get the deal done. This is according to a report in The Wall Street Journal [a paid service].

Tribune has issued about $7 billion in debt (yes, this deal's almost all debt). However, the debt markets were not so easy.

Tribune not only had to up its interest rates but also sell notes at a discount. In fact, Wall Street advisers had to forgo some fees.

It's too early to know if this is a sign that credit markets are generally getting tougher. But as for Tribune, the company still will need to raise $4 billion more in financing at the end of 2007. So, if credit markets get tougher, the financing may get even more onerous.

Today, Tribune's stock price fell 2.77% to $32.28.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

One of the driving forces of the buyout boom is the easy credit. In fact, not only have interest rates been low – but the contractual terms on buyout debt has been loose as well.

However, with volatility in the financial markets and the meltdown in the subprime marketplace, buyout lenders are getting a little concerned.

This is a according to a recent piece in LBO Wire [a paid service].

The article points to the cases of Graham Packaging and Ply Gem Industries, Inc. Both refinanced their debts. However, the lenders added some convent protections.

There was also resistance on the financing for the $1.95 billion deal for Realogy Corporation (NYSE: H). The buyers tried to get 225 basis points over the Treasury rate – but instead got 300 basis.

No doubt, this is fairly anecdotal. The fact remains that financing is still very loose – and more and more deals will continue to get done. But, at least in some cases, lenders are pushing back.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.