Mumbai:
Banks financing buy-out firm Kohlberg Kravis Roberts & Co.''s acquisition of
First Data Corporation plans to raise as much as $10 billion selling loans, double
the amount targeted last week. A
consortium of six banks led by Credit Suisse Group, Citigroup Inc., Deutsche Bank
AG and Goldman Sachs Group Inc. will sell as much as $8 billion of the debt at
a discounted 4 per cent. A further $2 billion will be sold at a 3 per cent cut-off,
said one banker associated with the loan sale. First
Data''s banks had reduced the loan offering to $5 billion from $14 billion earlier
this month because of a lack of demand. South
Korea''s National Agricultural Cooperative Federation, better known as Nonghyup,
has agreed to lend $180 million to KKR''s $26 billion purchase of First Data, a
Nonghyup official said. "Credit
Suisse tapped us, saying KKR was looking for senior managing agents in Japan to
finance the deal," said another official of Nonghyup''s investment banking
division. "We
have decided to make the lending and the loans will be extended around October
15." He
said a number of Japanese banks, including Mizuho Corporate Bank and Sumitomo
Mitsui Banking Corp, were among more than 100 lenders to the leveraged buyout. First
Data''s loans pay annual interest of 2.75 percentage points over the London interbank
offered rate (Libor), unchanged since the deal was announced in July. New
York-based KKR, run by Henry Kravis and George Roberts, agreed to buy First Data
in April, before the subprime mortgage market crisis caused the collapse of collateralised
debt obligations that buy leveraged loans. Another
KKR deal, the 9 billion-pound ($18 billion) financing for the acquisition of UK
pharmacy chain Alliance Boots, has languished on underwriters'' books since July.
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