The hold-up with pending deals continues

Folks, the deal financing situation remains fluid. Some earlier news reports suggested that Citigroup was still willing to lead the financing effort behind the TXU deal, which Kohlberg Kravis Roberts and Texas Pacific so arduously crafted. There have been subsequent reports that seem to confirm that Citigroup and other banks have offered to pay a $1 billion break-up fee. According to Financial News Online, that may be cheaper than swallowing some huge losses on loans they would have to provide. What may be going on: the banks surveyed the market and determined that no matter how attractive they make the debt, the buyers just aren't there. This holds for the many deals caught in the credit crunch. With CLO issuance basically at a standstill, it's hard to see where the buyers would be coming from, even with more attractive terms. But again, all this is in flux. The deal mavens may still have a few cards up their sleeves. Stay tuned.  

For more:
- here's the article from Financial News Online