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KKR Prepares for Test of Credit Markets

Fate of pending deals may foretell future of private equity

By Sam Gale Rosen,  Newser Staff

Posted Sep 11, 2007 8:17 AM CDT
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(Newser) – Kolhberg Kravis Roberts is pushing forward with some of the biggest deals in US history, but the iconic buyout firm finds itself under unprecedented scrutiny. Analysts say the huge deals KKR has pending will be a test of the struggling credit markets, the Washington Post reports: If they don't go through, the age of private equity may be over.

Pending deals for TXU and First Data loom as bellwethers for KKR. One insider tells the Wall Street Journal First Data is "the canary in the coal mine. If it gets done, then another $350 billion is doable. But if not, then the whole market may plunge, and the rest of the capital markets will react badly."

The TXU headquarters sign is shown in downtown Dallas, Tuesday, May 8, 2007. Electricity provider TXU Corp., which agreed to a $32 billion buyout led by KKR and Texas Pacific Group, said Wednesday it swung to a first-quarter loss from year-ago profit due to hefty charges for halting development of...
The TXU headquarters sign is shown in downtown Dallas, Tuesday, May 8, 2007. Electricity provider TXU Corp., which agreed to a $32 billion buyout led by KKR and Texas Pacific Group, said Wednesday it...   (Associated Press)
This handout picture shows US buyout king Henry Kravis speaking...
This handout picture shows US buyout king Henry Kravis speaking...   (Getty Images (by Event))
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First Data deal shows the shape of things to come
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private equity • KKR • First Data • Henry Kravis • hedge fund • credit market

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