Russ Winter wrote this interesting post analyzing the extraordinary amount of debt that will be needed to sustain Blackstone’s bid for Hilton Hotels:

The total purchase including the balance sheet and debt looks to be about $29 billion. Typifying just how loonie these transactions have become, HLT has operating income of about $1.2 billion, or a mere 4.1% of the take out price. Assuming $25 billion in debt, that would place debt service at about $2 billion a year. Blackstone plans no divestitures, so the math is straightforward, and the presumption is as well, just borrow the balance.

The $25 billion of debt that Blackstone is heaping on Hilton far exceeds Hilton’s book value of a bit under $4 billion, which means that there will not be much a recovery, at least immediately, in the event that things don’t go well and Hilton has to be reorganized or liquidated.
That type of debt risk sure sounds like equity-style risk to me. And with a ceiling on the return of about 8% ($2 billion of debt service on $25 billion in debt). My sense is that the Blackstone limited partners are betting on returns substantially higher than that.