Reuters: Mergers News: BASIS POINT-KKR in talks to amend, extend $938 mln BIS loan

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BASIS POINT-KKR in talks to amend, extend $938 mln BIS loan Apr 2nd 2012, 09:44 Mon Apr 2, 2012 5:44am EDT By Sharon Klyne HONG KONG, April 2 (Reuters) - KKR & Co is in early talks with banks to amend and extend a A$905 million ($938 million) loan used to buy Australia's BIS Industrial Logistics, Reuters Basis Point reported on Monday, citing a source familiar with the talks, as uncertain markets continue to hamper exits for buyout funds. KKR borrowed the money in 2006, and would usually be expected to exit through a sale or IPO before the debt expires in June 2013. But IPO markets have ground to a halt and corporate buyers are less willing to part with cash because the European debt crisis has led to fresh fears about a global recession. Buyout houses like KKR are having to invest more capital and delay returns, or restructure the debt on their assets. In February, KKR used a $300 million high-yield bond to take out debt on its Singapore technology company MMI International, the first time a bond had been used in Asia to take out a buyout loan. A KKR spokesman declined to comment when contacted by phone. The firm will have to pay more for the proposed 18-month extension to the life of the debt than it did on the original deal, the report said. Two tranches on the 2006 deal pay margins of 225 basis points over BBSY, but were priced during the buyout boom when debt was readily available and relatively cheap. BIS Industrial was originally part of Cleanaway and Industrial Services Australia, which KKR acquired from Brambles Industries Ltd in 2006. Credit Suisse underwrote the original loan and more than 20 lenders joined in general syndication. Link this Share this Digg this Email Reprints

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