Loans for big buyouts won't come so easy in the wake of Wall Street lenders
getting hit with big losses lately. Just ask General Motors Corp. The Detroit
automaker's deal to sell its Allison Transmission unit to buyout shops has hit
a speed bump. The Wall Street Journal reported Tuesday the $3.1 billion
financing to Carlyle Group and Onex Corp. was postponed, but a financial
package should be worked out soon. The two buyout shops reached an agreement
to
acquire Allison Transmission for $5.7 billion on June 28. Lenders are
being extremely cautious because of recent conditions in the market for risky
corporate loans and bonds. Deutsche Bank AG of Frankfurt estimates losing as
much as $90 billion in risky debt, according to Credit Suisse Group, and
industry experts expect more pain to come. The delay in the loan for Allison
Transmission raises some concern that the
$20
billion loan deal for Chrysler Group may be scrutinized and may postpone
that deal as well. —Gerald Magpily
See
MarketWatch article
See
Bloomberg article
See
TheDeal.com June 28 article
Tags:
General
Motors,
Allison
Transmission,
private
equity
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