Kohlberg Kravis Roberts & Co.’s banks sold $9.4 billion of loans used for the buyout of First Data Corp. in the biggest offering of high-yield loans since corporate funding dried up in July, according to people with knowledge of the transaction.
Buyers are starting to return to the market after record mortgage foreclosures prompted investors to shun all but the safest debt. Underwriters led by Citigroup Inc. and Credit Suisse Group had to offer a 3 to 4 percent discount to sell the First Data loans, and are still left holding remaining debt to fund the $26 billion buyout of the Greenwood Village-based company.
“It’s a significant event on the road back to normality,” said John Pattullo, who manages about $2 billion of mainly high-yield bonds and loans at Henderson Global Investors in London.
Banks for First Data, the biggest processor of credit-card payments, cut the loan sale to $5 billion this month because of a lack of demand. The six banks issued $7.6 billion of the debt at a discount of 4 percent of face value, the people said. A further $1.8 billion was sold at a 3 percent cut, said the people, who declined to be identified because details of the sale are private.
