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Non-Tech : Bill Wexler's Trading Cabana -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (2136)	6/7/2007 6:45:28 PM
From: 8bits	Read Replies (2) \| Respond to of 6370

Not a dime went into treasuries. They fall too and they fall fast, in Europe and in the US. This is a new development and it can only mean tight money. Are treasury prices (at least on the long end..) reflecting an expected return to inflation..? Are we returning to an era like the 70s which were marked by poor returns in long bonds and stocks...? Perhaps commodities and precious metals (on a pull back..) and short term instruments are in order...? (Doubtless some of the easy money has flowed also into commodities and precious metals..)

To: RockyBalboa who wrote (2136)	6/12/2007 5:38:11 AM
From: Doc Bones	Read Replies (4) \| Respond to of 6370

For KKR, Bumps in Its Buyout Binge By DENNIS K. BERMAN and HENNY SENDER June 12, 2007; [WSJ] Page C1 As Wall Street digests a feast of buyout deals announced during the past few months, one especially active buyout giant, Kohlberg Kravis Roberts & Co., is finding they don't all go down easy. KKR has tapped out some of the traditional investors it might typically turn to in funding large transactions, setting it on a different course in the $26 billion acquisition of First Data Corp., a processor of electronic payments. People familiar with the matter say the deal isn't in jeopardy, but in its search for new partners in the acquisition, KKR finds itself haggling over terms it once could dictate. The tensions it has encountered underscore how saturated the market has become for some big private-equity deals. It also underscores the challenging environment private-equity firms could be facing -- investors are pushing back against some deals just as rising interest rates could make it more expensive for them to borrow money. "We have enough exposure to KKR already," says an executive at one major investor who invests money in private-equity firms on behalf of a variety of pension funds, endowments and wealthy families. "We have concentration limits with the private-equity firms and with KKR, we have reached the limit." In any buyout, private-equity shops like KKR line up billions of dollars in debt to finance the transaction. They also put in equity, using money from funds they raise. Sometimes, in big deals, they also tap the pension funds, endowments and wealthy families that invest with them as co-investors who ante up even more money on the side. In exchange for the extra money, the co-investors get to participate without paying big fees. But lining up co-investors this time has been complicated. KKR has been on a historic deal spree of late, taking part in five of the eight-largest buyouts of the year, including the buyouts of TXU Corp. and Dollar General Corp. Some traditional co-investors have balked at participating in the First Data buyout because they have been writing too many checks to fund other KKR buyouts lately. Search for Cash As its table of existing investors gets tapped out, KKR has turned to hedge funds and other investors for additional equity. In recent days, KKR has clashed with them over the fees these investors would have to pay for that equity, according to people familiar with the deal. KKR is putting $3 billion from its own funds in the First Data deal. It is seeking $4.2 billion from co-investors. It will finance the rest with debt, according to people briefed on the transaction. People close to the deal say that the equity will be placed on schedule, though the price is still being negotiated. They say there are multiple sources of equity given the quality of First Data's operations. In the past, KKR might have teamed up with rival private-equity firms, like Carlyle Group or Blackstone Group, to make a multibillion-dollar deal. But recently, private-equity firms have preferred to go it alone with the help of their investors. At issue in the latest round of haggling is the fees KKR's new batch of investors will have to pay. KKR's existing investors sometimes co-invest directly in big deals without having to pay any portion of the long-term profits from their investment, known as "carry," back to KKR. But those terms aren't in place for outsiders, who have been asked to pay as much as 20% of the carry to KKR. These investors have instead been fighting for 10% to 15%, according to people involved in the deal. The tensions also highlight an obscure but important cog in the private-equity deal-making machine -- the bridge-equity commitment. These are equity commitments taken on by banks to help their private-equity clients speedily sign up a transaction. The banks put up the money as a bridge for a short period of time, until the stakes are sold by private-equity firms to investors. Until that equity is placed, banks are on the hook for the equity. They also make bridge commitments for debt used to finance deals. Banks are loath to take on bridge commitments because they run the risk of being stuck with the stake should the syndications fail. Yet they often feel compelled to do so, given that private-equity buyers pay hundreds of millions of dollars in financing fees. 'Burning Bed' Memories Wall Street is deeply paranoid about bridge financing. In a famous event dubbed the "Burning Bed," First Boston Corp. in 1989 made a $457 million bridge loan to the purchasers of Ohio Mattress Co. When the junk-bond market collapsed soon afterward, First Boston couldn't refinance the loan and ended up owning most of Ohio Mattress. Credit Suisse had to inject additional capital into First Boston, culminating in a full takeover. In the First Data buyout, KKR is relying heavily on its banks to bridge the deal. Those banks -- which include Citigroup, Credit Suisse, Deutsche Bank, HSBC, Lehman Brothers and Merrill Lynch -- are bridging the $4.2 billion in total, according to people familiar with the deal. online.wsj.com

To: RockyBalboa who wrote (2136)	8/31/2007 2:21:25 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 6370

Cerberus Investment into the bank totalled 4.35B. The recently posted H1 was 122M, a yield of 5.6%. Not cheap.

To: RockyBalboa who wrote (2136)	7/13/2008 9:00:43 AM
From: RockyBalboa	Respond to of 6370

GE's planned spin-off signals failed auction By Eleanor Wason LONDON (Reuters) - General Electric Co's (GE.N: Quote, Profile, Research, Stock Buzz) announcement it will look at spinning off its entire consumer and industrial business rather than selling its appliance arm may signal another failed auction. GE Chairman and Chief Executive Jeff Immelt rattled off a list of names he said were interested in the appliance unit in May. But the change in plan suggests GE decided it couldn't get a high enough price as prospective buyers struggled to finance a deal that would involve heavy exposure to a lacklustre U.S. economy. A source close to one prospective buyer had described valuing the unit as being like trying to catch a falling knife. Estimates ran from $4 billion to $8 billion, but people close to interested bidders had expected GE to go for a spin-off if offers looked likely to come in towards the bottom of that range. Low offers have become common in the United States as tightening credit markets have made it more difficult and expensive to raise funds for acquisitions, leading to a slowdown in deal activity and a slide in asset prices. Private equity buyers are having to face up to the idea that they probably overpaid during their zealous shopping sprees for companies in the past two years and some of these investments may now run into trouble in an economic downturn. Deals that have collapsed since the credit crunch set in last year include audio equipment maker Harman International Industries Inc (HAR.N: Quote, Profile, Research, Stock Buzz), equipment renter United Rentals Inc (URI.N: Quote, Profile, Research, Stock Buzz), student lender Sallie Mae (SLM.N: Quote, Profile, Research, Stock Buzz) and Penn National Gaming (PENN.O: Quote, Profile, Research, Stock Buzz). In Europe, France Telecom's (FTE.PA: Quote, Profile, Research, Stock Buzz) proposed $40 billion bid for rival TeliaSonera (TLSN.ST: Quote, Profile, Research, Stock Buzz) and the auction to private equity of Italian luxury goods company Roberto Cavalli are just two recent deals that have fallen apart. Immelt listed Haier(1169.HK: Quote, Profile, Research, Stock Buzz), GE's Chinese rival, South Korea's LG Electronics (066570.KS: Quote, Profile, Research, Stock Buzz), Sweden's Electrolux(ELUXb.ST: Quote, Profile, Research, Stock Buzz), Mexico's Controladora Mabe and Turkey's Arcelik ARCLK.IS as obvious bidders, raising the possibility of a newly ambitious emerging market player buying a well-known U.S. brand.