Buffett to the rescue of TXU?

Good news for the banks that ended up holding $11 billion in bridge loans used to finance Kohlberg Kravis Robert's deal for TXU. Fortune notes Warren Buffett has apparently invested nearly $4 billion in TXU high-yield bonds, which can be used by the company to pay of the loans, held by the likes of Citigroup, Goldman Sachs, JP Morgan Chase and others. On the surface, it would appear to be a canny buy for Buffett. The terms of one deal: A price of 95 cents on the dollar for an effective  yield of 11.2 percent. The other, for PIK-toggle bonds: 93 cents on for a yield of 11.8 percent. So there are deals to be had when it comes to these loans. The banks really need to get them off their books. They're willing to pay up.  

For more:
- here's the Fortune article

Related articles:
- Bear Stearns in talks with Buffett
- Bear Stearns reshuffles executives
- Is the TXU deal in trouble?

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