Higher Rates May Dim the New Dawn of LBOs

For Kohlberg Kravis Roberts, Bain Capital and their partners, the cost of acquiring hospital operator HCA will be nearly $100 million higher for than it would have been just three months ago, according to Bloomberg News.

That’s because of higher interest rates, which, together with stricter terms from banks, are making life a little tougher for private equity firms and others who want to finance takeovers with debt.

The days of (almost) free money from banks to fund take-private transactions appear to be drawing to an end.