LBO banks meet their Waterloo with Boots deal; KKR unscathed
The banks arranging the loan to support Kohlberg Kravis Roberts’s £11bn leveraged buy-out of UK pharmacy group Alliance Boots were left holding more than £7bn of senior debt on Wednesday, when they bowed to what many had considered inevitable and pulled most of the debt financing.
The deals collapse was mirrored in the US when the $12bn loan for Cerberuss buy-out of carmaker Chrysler was also abandoned.
Turmoil in credit markets, especially leveraged finance, took the blame, but market participants also criticised KKR, which will still enjoy the original debt terms agreed before the market
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