Banks Poised To Sell Debt In Alliance Boots- FT

DOW JONES NEWSWIRES

A group of investment banks are ready to agree a plan to sell much of the GBP9
billion debt in Alliance Boots PLC, the private equity-owned pharmacy chain, The
Financial Times reported on its Web site Tuesday.

If banks proceed with the sale, they are likely to take more writedowns,
according to the FT report. This is likely to particularly affect European
lenders such as Barclays PLC (BCS) and UniCredit SpA (UCG.MI), the report said.

A syndicate of eight banks has been holding the Alliance Boots debt since
underwriting last summer’s GBP11 billion buyout by Kohlberg Kravis Roberts & Co.
in Europe’s biggest ever private-equity deal.

Deutsche Bank AG (DB) is seeking to secure approval from the other banks as early
as next week for a plan to start selling the debt, the newspaper said. Hundreds
of investors, including private equity, sovereign wealth funds and money
managers, have expressed interest, according to the FT.

An earlier plan to offload some of the debt was abandoned earlier this month
after some banks, including Barclays and Royal Bank of Scotland Group PLC (RBS),
balked at the terms, the newspaper said.

Any new plan would need unanimous approval of all banks in the group, which
includes Citigroup Inc. (C), JPMorgan Chase & Co. Inc. (JPM), Merrill Lynch & Co.
Inc. (MER) and Bank of America Corp. (BAC), the FT said.

While the exact structure and timing of a sale has yet to be finalized, investors
have been guided towards a price of about 91% of face value for the debt,
according to the FT.

A person close to the group of banks said the book-building process had found
strong demand from a wide variety of investors, including KKR Financial, the
listed debt arm of KKR, Blackstone’s GSO debt fund, Apollo Management and
Carlyle, the newspaper reported.

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