Aerospace and Defense
Defense budgets are not declining as sharply as some had feared, but companies are scrambling to ensure continued earnings growth. Get exclusive insight into the defense sector from the Reuters Aerospace and Defense Summit. Full Coverage
Nonghyup to lend $180 mln to KKR for First Data deal
SEOUL (Reuters) - South Korea's National Agricultural Cooperative Federation, better known as Nonghyup, will lend $180 million to Kohlberg Kravis Roberts' $26 billion purchase of First Data, a Nonghyup official said on Thursday.
U.S. private equity firm Kohlberg KKR.UL completed the leveraged buyout of payment processor First Data Corp FDC.N on Monday.
Lead banks Citigroup (CS.N) and Credit Suisse (CSGN.VX) began selling the first $5 billion of a planned $15 billion loan for the deal last week. The $5 billion loan carries price talk of 275 basis points over the London interbank offered rate.
"Credit Suisse tapped us, saying KKR was looking for senior managing agents in Japan to finance the deal," said an official of Nonghyup's investment banking division, asking not to be named.
"We have decided to make the lending and the loans will be extended around October 15."
He said a number of Japanese banks, including Mizuho Corporate Bank and Sumitomo Mitsui Banking Corp, were among more than 100 lenders to the leveraged buyout.
Nonghyup, established as a specialist lender mainly to farmers, is the only Korea-based senior managing agent for the acquisition, which usually lends more than $100 million.
Its investment banking team has participated in other leveraged acquisitions by KKR and will continue to be selectively investing in or lending to similar transactions, he added.
The 7-year loans to First Data is expected to net Nonghyup 36 billion won in profit for that period, excluding cost of capital.
Loan market participants have been keeping a close eye on First Data's loan, as it comes after the U.S. subprime mortgage market sparked a global credit crunch.
