This is just plain shady if true: leveraged, leveraged buyouts?

From the sounds of this article Guy Hands Rejects Bank LBO Debt Offers, Sees Subprime Parallels it seems that banks are participating in a ridiculously sketchy-sounding practice: they appear to be bridging sales of bridge-loans that they can no longer sell to the same private equity firms to whom the loans were originally pledged.

In effect, they are loaning money to the same firms to whom the original loans were made.

This is analogous to a 2nd Mortgage Holder on a home loaning a home buyer money to buy the mortgage on their own house.

It is unclear from the article if the bridge^2 are coming from CLO's but if so, this is really 3 layers of leverage to consumate these transactions.

I am hoping the author either misunderstands or is mistaken about the financing for these deals, but given the last year's events, it is probably accurate. Especially when considering that all involved get paid fees based on a percentage of the total $ value of these transactions, there are issues beyond issues all wrapped up in a shady looking box here.