I have just returned from meeting in India with a new buy-side BPO client and read the great news about KKR and their banks agreeing on new covenants in their loan agreement for the first data acquisition. Why should you care? Well, since there is anywhere from $350b - $450b of debt hanging on the backs of the large money center banks that have been promised to private equity groups, that currently are not attractive to traditional syndicate lenders, and can't fund, this creates a dilemma for the market - a huge backlog.
Up until now, the market has been frozen and nothing has been happening. Investors won't buy the loans, and the banks refused to honor their loan commitments. When these loans were negotiated, the market was more favorable to buyers, and the then current thinking was they could be sold to some investor, somewhere. Whether the deal was thinly capitalized, had poor EBITDA/Interest coverage or new fangled terms like borrower friendly PIKs and so forth, that world changed.
The fact that the first of these suspended deals has been re-negotiated is good for all. Now let's see if investors will have an appetite for it and will eat that dog food.
marty