Kohlberg Kravis Roberts & Co., the leveraged-buyout firm purchasing First Data Corp., warned Monday it is under pressure from a recent spike in corporate bond rates.
“More costly and restrictive financing may adversely impact the returns of our leveraged-buyout transactions and, therefore, adversely affect our results of operations and financial condition,” the company said in a filing with the U.S. Securities and Exchange Commission.
KKR offered $29 billion for the Greenwood Village-based credit-card processor in April but has struggled to sell long-term bonds to finance the deal.
If debt becomes too expensive, the returns KKR can earn on the $2.1 billion of its equity invested in First Data will suffer.
Investment banks have committed enough short-term financing to complete the deal. First Data has told investors that the purchase is on track to go through by the end of September.
A big push to sell debt to permanently finance the First Data buyout is expected after Labor Day. Citigroup analysts estimate $330 billion in corporate-buyout debt is seeking investors in a market where credit has tightened.
KKR filed July 3 to sell shares in an initial public offering to raise money to fund buyouts and expand the firm.
Staff writer Aldo Svaldi can be reached at 303-954-1410 or asvaldi@denverpost.com.
