Citigroup Inc is in talks with private equity firm Kohlberg Kravis Roberts on funding for the purchase of some of the leveraged loans on its balance sheet.
It has also talked to other private equity firms about providing such funding.
Leveraged debt
Banks have been looking for ways to help clear some of the $300 billion worth of leveraged loan commitments they have made.
However they are struggling to sell on to investors following the credit turmoil.
KKR is raising money for an existing hedge fund to buy leveraged loans and other impaired debt.
There are rumors that the combined firepower of all the funds being raised to buy leveraged buy-out debt could equal as much as $170 billion.
This compares with the estimated $300 billion of funding banks have committed to private equity firms.
Citigroup and KKR were not immediately available for comment.
October 4 2007
Related Links
Citigroup
Kohlberg Kravis Roberts
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