In what could be the most watched private equity deal of the year, a consortium of buyout firms led by billionaire investor Wilbur L. Ross has set its sights on BankUnited Financial Corp. (NASDAQ: BKUNA), says the Wall Street Journal (subscription required). The consortium includes Carlyle Group and Blackstone Group (NYSE: BX).

Earlier this year, federal regulators declared that the Florida-based lender was "critically undercapitalized" and demanded that it find a buyer or raise new capital. While regulators have traditionally favored other lenders in sales of banks, if Ross's group is successful, it would not only be one of the largest acquisitions in the financial-services sector made by private equity, but could also signal a shift in the government's attitude toward private-equity buyers of banks.

Wilbur L. Ross has spent his career managing complex bankruptcies and restructurings. And he's pretty good at it -- he is now a billionaire. In fact, he's so good that Goldman Sachs recently partnered with him to start a fund to capitalize on prospective financial implosions.

Well, according to a report from Reuters, Ross thinks that 2007 will be a tough year, especially for companies that have loaded-up on debt for buyouts. He sees many more bankruptcies and as a result expects to see a 7% default rate on junk bonds. That would be an increase of 700%.

He also mentioned that the holders of junk bond debt have changed. There are now many hedge funds that have played in this market. If a leveraged company has problems, will a hedge fund really be interested in working with management? Or will the hedge fund use tough tactics to salvage the investment?

Another concern of Ross: he believes that in buyout deals, the multiples are simply too high.

In other words, if things go wrong, things are likely to unwind quickly. Of course, for Ross, this will mean more good times ahead.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.