The ones that didn’t get away
IT CAN’T BE often that Henry Kravis, co-founder of Kravis Kohlberg Roberts, has to eat his words. But that is something that he might soon be forced to do if the leveraged loan market does not quickly recover from a bad case of the frights it caught during June. Just one month earlier, in May, Kravis had described market conditions as a "golden era" for buyouts. In June, though, financing packages that had been put together for several of his firm’s deals were facing emergency restructuring or even complete postponement in the loan market. By July, the $18 billion loan financing for KKR’s acquisition of UK firm Alliance Boots had been pulled as investors balked at the aggressive, covenant-lite terms. It is not Kravis but his banks that are faced with this problem – and that means that for sponsors such as...
