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Private Equity Teaching Banks to Roll Over, Play Dead, Fetch Billions

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How exactly do bank credit guys describe their job these days? It sounds a lot like it could be summed up as "pushing money out the door."
From Bloomberg:

Henry Kravis and Stephen Schwarzman never had an easier time getting the lowest interest rates on loans from their bankers.
Just three months after borrowing $12.8 billion to pay for hospital operator HCA Inc. in November, Kohlberg Kravis Roberts & Co. and its partners negotiated a new loan with lower rates. Schwarzman, chief executive officer of Blackstone Group LP, is doing the same for a $3.5 billion loan that financed the takeover of Freescale Semiconductor Inc., the mobile-phone-chip maker.
Leveraged buyout firms are leading borrowers refinancing $64 billion of loans so far this year, more than in all of 2006, according to ratings company Standard & Poor's. Banks are giving in and reducing rates because corporate defaults are near all- time lows.
"This is the best loan market for borrowers I have ever seen,'' said Kenneth Moore, a managing director at First Reserve Corp., a private equity firm in Greenwich, Connecticut, that manages more than $12.5 billion and specializes in buying energy companies.
Loans for companies rated four or five levels below investment grade yielded an average 2.26 percentage points more than the three-month London interbank offered rate in the week ending Feb. 15, S&P says. That gap over Libor, a lending benchmark, was the smallest ever and compared with more than 4 percentage points in 2003. The difference saves $17.4 million a year for every $1 billion a company borrows.

Oh. If you're keeping score at home, put another mark down under the column for "Private Equity Not In Trouble."

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