Anyone want to buy a loan?

Alisa Roth Oct 8, 2007
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Anyone want to buy a loan?

Alisa Roth Oct 8, 2007
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TEXT OF STORY

Scott Jagow: I believe we pronounced the private equity boom dead a few weeks ago. But there are signs of life this morning.

Citigroup and JP Morgan Chase are looking for buyers for $32 billion in loans. That money was used to purchase the Texas utility giant TXU back in February. It was a huge private equity deal.

If the banks can get people to buy this debt, it might signal a return of cash to the market. Here’s Alisa Roth.


Alisa Roth: TXU might be the biggest leveraged buyout ever, and it’s certainly the biggest deal to come to market this year. Banks have been worried investors wouldn’t buy debt after the subprime mortgage mess this summer.

Chris Donnelly is with Standard and Poor’s LCD. He said banks were relieved when investors bought up more than $9 billion of debt from First Data Corp earlier this fall.

Chris Donnelly: After a summer of discontent, banks are seeing at this point that the financing markets have picked up somewhat.

Donnelly says even so, TXU’s banks probably won’t be able to sell all the debt in one go. But he says the fact the deal’s going ahead is a good sign.

Donnelly: It means that investors are open for business for quality deals. It bodes particularly well for other large leveraged buyouts that are still coming to the market later this year.

Donnelly says those buyouts could include wireless company Alltel and media giant Clear Channel.

In New York, I’m Alisa Roth for Marketplace.

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