Caution is the watchword nowadays in banking and borrowing. Just ask HSBC Private Equity, an arm of British bank HSBC Holdings plc, which recently agreed to buy Viking Moorings Ltd., an offshore oil services company with a global footprint, for a price in the range of £180 million to £200 million ($305 million to $339 million). Not exactly a megadeal, but Viking's a good, solid company that the seller, Inflexion Private Equity Partners LLP, was happy to reinvest in, looking to benefit from the upside. Yet the deal required four banks to put up the debt.

Similarly, with Candover Partners Ltd.'s £553 million sale of oil and commodities consultancy Wood Mackenzie Ltd. to Charterhouse Capital Partners LLP, it took three banks, HSBC, Lloyds Banking Group plc and Nomura Group, to underwrite the financing, with a reported £170 million of senior debt.

In such a climate, it is hardly surprising that companies cannot simply turn to their existing banks for a bit of extra lending when it comes time to refinance debt laid on them in less risk-averse times. Especially for deals done in mid-2007, where underwriting banks were left with unsyndicated debt on their own balance sheets, there is an understandable reluctance to roll over existing arrangements, even for a mighty fee. As for debt-for-equity swaps, banks are not in business to own companies. The sensible approach is to just say no. Nor is there much appetite for private equity sponsor-led debt buybacks, on which the lender takes a haircut to within a millimeter of its scalp.

But debt markets are apparently coming back to the point where refinancing may make some sense for the bank as well as the debtor company. With leveraged loans trading at close to 90% of face value, according to Standard & Poor's, there is renewed interest on all sides in high-yield debt issuance. Music company EMI Group Ltd., for instance, is working on a high-yield bond issue of £200 million to £280 million. The bonds, together with an equity injection of £300 million already approved by Guy Hands' private equity firm, Terra Firma Capital Partners Ltd., would help it reduce and refinance £2.6 billion of buyout debt provided by Citigroup Inc.

Now comes talk of a reopening of the market for initial public offerings -- and using some of the money to pay down debt. With all the doom and gloom surrounding the private equity industry, it is curious to learn that Kohlberg Kravis Roberts & Co., for one, is preparing to sell a swath of its buyout portfolio back to the stock market.

The Singapore semiconductor company Avago Technologies Inc., which KKR and Silver Lake plan to list on Nasdaq for a 146% partially realized gain on their four-year-old investment, hardly sounds like a clunker. And it reportedly allows KKR to take deal fees on the listing at the expense of the underwriting banks.

KKR is also said to be preparing other companies for listings, among them discount retailer Dollar General Corp., Toys "R" Us Inc., hospital group HCA Inc., credit card processor First Data Corp. and Danish telecom group TDC A/S. Not coincidentally, KKR is also preparing its own flotation by merging with its Amsterdam-listed affiliate in the fall.

But it is worth remembering that even KKR has stepped back from listing directly onto the NYSE, as previously planned, and that the Avago deal, for example, will only include a relatively small percentage of KKR's total holding in the company. Clearly, even KKR sees there's no point in selling too much stock or taking too big a risk while the market is still so uncertain. The offerings marketed so far have not primarily been about making profitable exits, but making a bit of cash, possibly paying down debt -- and maybe helping to revalue the private equity sponsor's portfolio.

If the purpose is only to keep creditors at bay while staying relatively fully invested, then an IPO in a weak market may still hold a glimmer of logic. It would be akin to a listed company making a heavily discounted offering to its own shareholders -- who put up extra cash to avoid dilution -- while wooing new money from outsiders with a share placement. In the short term, money comes in to pay the bills; in the longer term, everyone still has a chance to make a profit.