Last in, first out. Expedia was late to jump on the leveraged recapitalisation bandwagon in June. It planned to take advantage of extremely cheap debt to buy back 42 per cent of its stock and increase net debt to more than 5 times earnings before interest, tax, depreciation and amortisation. Weeks later, credit wobbles have stymied the idea. The online travel company will now buy back 8 per cent of its shares – a normal programme when compared with the almost leveraged buy-out capital structure Expedia was planning.

What are the implications? First, clearly, credit markets are no longer willing to play ball on all deals. Spreads have widened significantly since the lows reached at the time of Expedia’s announcement and there are jitters about how easily big leveraged buy-outs coming through the system will get financed. Second, if the new reality in the credit markets sticks, the rush to buy public equity with cheap debt will slow.

That could reduce activity from private equity buyers. It could also reduce pressure on public market management teams to gear up company balance sheets before private equity firms do it for them. In addition, it might blunt one weapon used by activist investors, who often demand more balance sheet leverage.

That said, both high-yield and investment-grade debt remain cheap by historical standards. With the economy still looking reasonably robust, and default rates very low, balance sheet re-gearing is not about to disappear. If nothing else, it is one more lever for companies to pull in the quest to maintain earnings per share growth. Companies might scale back their ambitions. But doing so has not hurt Expedia too much. Even after Monday’s fall, its shares are still comfortably above where they were in June, before the plan was first hatched.