Monday, July 16, 2007

KKR Cancels $1.4 Billion Refinancing for Maxeda LBO

It is spreading.........No wonder KKR is rushing to file the IPO......

Der Anleihe/Kreditmarkt zeigt erste Zeichen von zurückkehrendem Risikobewußtsein....Kein Wunder das KKR so schnell wie möglich den eigenen Börsengang durchziehen will......

July 16 (Bloomberg) -- Kohlberg Kravis Roberts & Co. canceled 1 billion euros ($1.4 billion) of loans it was seeking for Dutch home-improvement retailer Maxeda BV, a person involved in the transaction said.

The deal is the third to be postponed or restructured by KKR in as many weeks as losses from the U.S. subprime mortgage rout reduce investor demand for risky debt. The New York-based buyout firm is trying to raise 9 billion pounds ($18 billion) this week to finance its takeover of Nottingham, England-based drugstore chain Alliance Boots Plc.

KKR abandoned the financing for Amsterdam-based Maxeda after failing to entice investors by cutting the price of the loans and offering covenants to limit borrowing, said the banker, who declined to be identified because the discussions are private.

``This tells you there's some nervousness out there,'' said Rob Jones, head of high-yield research at Barclays Capital in London.

Cut Costs
KKR had intended to use the loans to cut its financing costs for Maxeda, the biggest operator of home-improvement stores in the Benelux countries, following its LBO in 2004. The debt would have replaced 275 million euros of high-yield bonds and 523 million euros of pay-in-kind notes, which don't pay interest until maturity, with lower-rate senior loans.

London-based buyout firms Candover Investments Plc and Cinven Ltd. last week pulled their financing for publisher Springer Science+Business Media GmbH in Berlin, according to International Insider.

In leveraged buyouts, firms put up a little of their own money and borrow the rest, piling the debt onto the company being acquired

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3 Comments:

Blogger Edgar, AKA Mort said...

This crash is sooo slow. I saw that another billionaire is being appointed US ambassador to something or other. The Netherlands, I think. Could be a sign of trouble brewing. That, or they want an indictment-proof gubbermint job with the Bush crime family. Why won't this thing crash already? God I hate the money maggots!

6:33 PM  
Anonymous Anonymous said...

It's worse than you can imagine. The other credit insurers also reinsure each other, including ACA.

8:41 AM  
Blogger jmf said...

Moin,

the action in ACA yesterday was just remarkable... up over 20%!

ACA remains on my "implosion" watchlist :-)

6:03 AM  

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