Kohlberg Kravis Roberts has agreed to increase the pricing of the loans it is using to back the $26 billion (19 billion) buyout of US merchant processes provider First Data, in a landmark move that could set precedents for the group’s stalled buyouts over coming months amid riskier credit markets, Financial News reports.
The buyout house is in talks with banks over the terms of $24 billion in loans being used to finance the deal and had agreed to increase pricing by 25 basis points.
The decision could mark a turning point in the global buyout industry which has been hounded by fears that the credit crunch could lead to banks holding large amounts of debt which they would otherwise syndicate to secondary credit investors.
Kohlberg Kravis Roberts is currently awaiting the syndication of debt on $180 billion worth of deals which has been held up by a rapid repricing of credit risk by lenders following the collapse of the sub prime lending market in the US.