KKR in talks with banks for First Data deal(2)

Kohlberg Kravis Roberts is currently in talks with the underwriters of the $24 billion (€17.7 billion) of debt associated with its buyout of First Data, according to The Wall Street Journal.

Although KKR is unlikely to make any major concessions on the terms of the debt, the firm could be willing to negotiate on smaller points, such as when the debt falls due and what tranche the debt occupies, the Journal said.

Banks involved with the deal are Citigroup, Deutsche Bank, Goldman Sachs, HSBC Holdings, Credit Suisse and Lehman Brothers.

This is not KKR’s only deal to suffer from credit market problems. In July, the banks underwriting KKR’s buyout of Alliance Boots – JP Morgan, Deutsche Bank and Unicredit – had to shelve syndication of £5.05 billion ($10.4 billion, €7.6 billion) of senior debt backing the deal, and was forced to sweeten the terms of the deal’s junior debt.

Citigroup and Goldman Sachs were also saddled with part of the $10 billion of debt underlying the sale of Chrysler to Cerberus Capital Management, $6 billion of which the banks eventually sold for 95 cents on the dollar.

Similar negotiations recently took place among the consortium acquiring HD Supply, consisting of The Carlyle Group and Clayton Dubilier & Rice, and their bankers, JP Morgan, Lehman and Merrill Lynch. The buyout firms agreed last Friday to cut the price of the deal from $10.3 billion to $8.5 billion, and Home Depot agreed to hold $1 billion of the senior debt associated with the deal. The terms of the debt were also revised, though the new terms were not disclosed.