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WEDNESDAY APRIL 23
While Sun Shines, Wall Street Makes Hay While you were out rubbernecking the Clinton victory over Obama, happen to notice the tiny bit of give the leveraged loan market has begun to yield in terms of improved prices? Deutsche Bank, JPMorgan and six other lenders did – and they’re pulling out fistfuls of hibernating multibillion-dollar loans to sell while the selling is good. More on which debts are expected to be offloaded first. April 2008Deutsche Bank AG, JPMorgan Chase & Co. and six more lenders are reviving a sale of 8 billion pounds ($16 billion) of loans used to finance the buyout of U.K. pharmacy chain Alliance Boots Ltd. The underwriters have been stuck with the loans since investors fled the market for debt used to finance leveraged takeovers last year amid losses triggered by the U.S. housing slump. Banks are seizing on an improvement in prices to try to sell the debt to investors, UniCredit SpA's head of credit strategy Jochen Felsenheimer said today. ``This recovery in leveraged loans is seen as a window for the banks to get rid of these loans,'' Munich-based Felsenheimer said in an interview. ``All the banks have the same incentive to do it so they will find an agreement on price.'' Kohlberg Kravis Roberts & Co. borrowed to buy pharmacy chain Boots in Europe's biggest leveraged takeover a year ago for 11.1 billion pounds. Bankers that aborted selling the debt to investors in July may offer discounts of 10 to 15 percent to entice bidders, based on the prices of LBO loans monitored by Fitch Ratings. Banks have reduced the $237 billion backlog of unsold LBO loans to $95 billion, the lowest in more than a year, according to Standard & Poor's. Goldman Sachs Group Inc. sold $500 million of debt financing the buyout of Chrysler LLC for as little as 63 cents on the dollar this month. Ronald Weichert, a spokesman for Deutsche Bank in Frankfurt, and Stefania Signorelli, a London-based spokeswoman for JPMorgan, declined to comment.
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