"Kohlberg Kravis Roberts & Co. appears willing to make a concession to the banks financing its $26 billion leveraged buyout of payment processor First Data Corp , according to a report on Sunday, in a move that underscores the intense pressure the credit crunch has put on investment banks and their top private equity clients. KKR has agreed to a covenant that places performance criteria on First Data's debt, the Wall Street Journal reported late on Sunday. The firm has agreed to maintain a certain level of earnings before interest payments, depreciation, tax and amortization (EBITDA) in relation to the senior debt, the report said, citing people familiar with the matter."
What great timing for class! We have been talking about the Nexus of Contracts and will be starting bonds this week.
In lack of the covenant, KKR would have to pay higher interest rates on their new debt.
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