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Kohlberg Kravis Roberts'' banks selling $10 billion loan for First Data acquisition news
27 September 2007

Mumbai: Banks financing buy-out firm Kohlberg Kravis Roberts & Co.''s acquisition of First Data Corporation plans to raise as much as $10 billion selling loans, double the amount targeted last week.

A consortium of six banks led by Credit Suisse Group, Citigroup Inc., Deutsche Bank AG and Goldman Sachs Group Inc. will sell as much as $8 billion of the debt at a discounted 4 per cent. A further $2 billion will be sold at a 3 per cent cut-off, said one banker associated with the loan sale.

First Data''s banks had reduced the loan offering to $5 billion from $14 billion earlier this month because of a lack of demand.

South Korea''s National Agricultural Cooperative Federation, better known as Nonghyup, has agreed to lend $180 million to KKR''s $26 billion purchase of First Data, a Nonghyup official said.

"Credit Suisse tapped us, saying KKR was looking for senior managing agents in Japan to finance the deal," said another official of Nonghyup''s investment banking division.

"We have decided to make the lending and the loans will be extended around October 15."

He said a number of Japanese banks, including Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp, were among more than 100 lenders to the leveraged buyout.

First Data''s loans pay annual interest of 2.75 percentage points over the London interbank offered rate (Libor), unchanged since the deal was announced in July.

New York-based KKR, run by Henry Kravis and George Roberts, agreed to buy First Data in April, before the subprime mortgage market crisis caused the collapse of collateralised debt obligations that buy leveraged loans.

Another KKR deal, the 9 billion-pound ($18 billion) financing for the acquisition of UK pharmacy chain Alliance Boots, has languished on underwriters'' books since July.


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Kohlberg Kravis Roberts'' banks selling $10 billion loan for First Data acquisition