What are "hung loans"? How to they relate to,,,?

how do they relate to investment banks/PE firms in a take-over,

Also, when a ibank/PE firm wants to takeover or buyout another company, does it first do so from debt or a bank loan or from sale of it's own bonds?

thanks, any info would be greatly appreciated

Hedge funds or private equity firms typically buy companies using borrowed money (sometimes up to 70% of requirements) and try to sell them later at a profit. Generally, the takeover is financed through a sale of bonds.

In the interim between when the takeover is launched and when the bonds are sold, though, investment banks typically agree to provide the cash through a bridge loan.

If the bond sale fails, the banks are stuck with a "hung loan," since the banks are committed to financing the deal whether or not they can sell the debt.

This is precisely what happened when investors embarked on a flight to safety earlier this summer. Investors began reassessing how much risk they were willing to stomach, and in doing so lost their appetite for the types of bonds that raise cash for private equity takeovers. This left investment banks with $351.35 billion in hung loans.

This is from another article:
Banks generally make these so-called bridge loans to expedite the closings of merger-and-acquisition deals. They then resell the loans in the secondary market.
When investment banks arrange financing for leveraged buyouts, they usually provide bridge loans to help close deals quickly. They then sell the debt in the market. When LBO financing stalls or fails, these banks are left with so-called hung loans.

You can read both articles at the links.