What was the 1989 U.S. leveraged-buyout market collapse called?

The 1989 U.S. leveraged-buyout market collapse was called the Friday the 13th mini-crash. It occurred on Friday, 13 October 1989, when the Dow Jones Industrial Average fell 190.58 points, or about 6.9%.

The immediate trigger was the collapse of United Airlines’ proposed leveraged buyout. The transaction had been designed to acquire the airline using substantial debt and employee ownership, but financing problems caused the plan to fail. Investors then reassessed other highly leveraged deals and related stocks.

The decline was concentrated in takeover-related shares and did not become a crash on the scale of October 1987. Nevertheless, the fall exposed concerns about junk bonds, corporate leverage, and the sustainability of the merger-and-acquisition boom.

The name can be confusing because the market fell on a Friday rather than a Monday or Tuesday. It is also sometimes described simply as the 1989 mini-crash. The precise nickname identifies both the date and its comparatively limited duration.