To its credit, Kohlberg Kravis Roberts has been able to close deals pretty much on schedule, despite a punishing credit environment. It has had to deviate a bit from standard practices. With Citigroup, it is forming a holding company that will buy leveraged loans. According to Financial News Online, Citigroup is financing $8 billion for the holding company, KKR has provided $2 billion in equity via its Strategic Capital fund. This would certainly help banks with hung loans; you have to think Citigroup will be the prime beneficiary. Still, the financing environment is tough. Selling bonds loom as an even bigger challenge. Yet discounts and more covenants seem to be working with buyers. The TX deal is expected to close next week.  

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