We have suggested previously that rates were a bigger threat to the private equity boom than taxes. That is becoming more evident with every passing day. The bond market is starting to get really nervous, and that spells bad news for top private equity firms. This week, an offering by U.S. Foodservice--bought by Clayton, Dubilier & Rice and Kohlberg Kravis Roberts for $7.1 billion--was delayed. All eyes are on now Dollar General and First Data, both KKR companies, which both have plans for an offering soon. The spread between lower-rated issues and government issues is starting to widen. No one is in panic mode, but the subprime mess has caused some powerful ripples. A lot of the fear is based on the subprime situation. If that clears up, everyone will feel better.

For more:
- here's an article from CNNmoney.com