The Games Afoot IV
Lets see now, how could we get the monkey off the high yield bond markets back? Hmmm, if we leaked a story about the RMB going to a sliding peg, you think that might clear the decks?
From The Financial Times:
Investment banks financing the purchase of US data storage group SunGard, the largest leveraged buy-out since the 1980s, are struggling to find buyers for the debt, raising fears that the downturn in high-yield markets threatens a new class of large private equity deals.
Deutsche Bank, JPMorgan and Citigroup recently began syndicating a $4bn bank loan, part of the financing of the $11.3bn deal, to hedge funds and other preferred investors before moving on to a formal roadshow. But early indications of interest in the bank loan and a $3bn bridge loan that will also soon be marketed, have been lukewarm.
The SunGard deal is signed, but the financing is not done by any means. Fingers crossed,” said one person familiar with the deal. The deal, in which seven private equity groups joined forces for the largest buy-out since Kohlberg Kravis Roberts bought RJR Nabisco in 1989, was seen as a model for future deals.
Nervousness about the SunGard financing comes as investors in high-yield markets, a main driver of LBOs, have become wary of taking on risk. If the banks fail to refinance the loans for SunGard, bought in March, they would be left with a large exposure.
A high-yield banker said: "If investors won't take it up, that will make the banks absolutely panic. You never want to be stuck with a bridge loan . .. all the institutions will get very concerned."
Big Buyout Hits Snag
From The Financial Times:
Investment banks financing the purchase of US data storage group SunGard, the largest leveraged buy-out since the 1980s, are struggling to find buyers for the debt, raising fears that the downturn in high-yield markets threatens a new class of large private equity deals.
Deutsche Bank, JPMorgan and Citigroup recently began syndicating a $4bn bank loan, part of the financing of the $11.3bn deal, to hedge funds and other preferred investors before moving on to a formal roadshow. But early indications of interest in the bank loan and a $3bn bridge loan that will also soon be marketed, have been lukewarm.
The SunGard deal is signed, but the financing is not done by any means. Fingers crossed,” said one person familiar with the deal. The deal, in which seven private equity groups joined forces for the largest buy-out since Kohlberg Kravis Roberts bought RJR Nabisco in 1989, was seen as a model for future deals.
Nervousness about the SunGard financing comes as investors in high-yield markets, a main driver of LBOs, have become wary of taking on risk. If the banks fail to refinance the loans for SunGard, bought in March, they would be left with a large exposure.
A high-yield banker said: "If investors won't take it up, that will make the banks absolutely panic. You never want to be stuck with a bridge loan . .. all the institutions will get very concerned."
Big Buyout Hits Snag
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