As I wrote on CFO.com last week, LBO dealmakers have access to cheap debt. New proof of that came out today. According to Reuters, KKR got the cheapest borrowing rates ever for a leveraged buyout. For the acquisition of Gardner Denver KKR is borrowing $2.4 billion in loans and $575 million in bonds. The blended average interest rate is 4.8 percent! KKR also arranged a $400 million revolver. The financing was rated single “B.” That’s junk territory, folks.
(A side note: the loan syndicated banker quoted in the piece calls KKR a “best-in-class” financial sponsor. He must not be following the demise of payments company First Data, which KKR has rode into the ground.)
- Gardner Denver Shareholders Approve KKR Takeover (fool.com)
- KKR raises $6b for second Asia buyout fund (gulfnews.com)