KKR Financial eyes Alliance Boots debt

The debt investment arm of Kohlberg Kravis Roberts is looking to buy loans related to the Alliance Boots buyout. The syndicating banks are considering providing discounted loans to back the debt sale.

KKR Financial, the listed debt investment arm of the global buyout firm, is considering buying the debt related to the buyout firm’s £11.1 billion (€14 billion; $21.6 billion) Alliance Boots transaction, according to KKR’s spokeswoman.

Alliance Boots debt: KKR
Financial target

Several other firms have looked at the Alliance Boots transaction, a lawyer said. The Boots banking syndicate are considering providing discounted loans to back the purchase, he said. In exchange for the discounted loans the syndicating banks will look to sell the loans at a higher price to book value, effectively redeeming some of the bank’s leveraged loan write-downs.

JPMorgan, Deutsche Bank and Unicredit, the lead arranging banks on the Alliance Boots transaction pulled the syndication of £8.25 billion of debt relating to the buyout last year.    

Deutsche Bank declined to comment.