Monday, November 3, 2008

Banks Willing to Lend to Carlyle Group

Those billions Uncle Sam invested in big banks may circulate through the economy after all. The Financial Times reported The Carlyle Group can still obtain loans for its buyouts.

At our end of the market, deals are still happening, and interestingly we can still raise debt to fund transactions," offered David Fitzgerald, managing director of Carlyle Europe Technology Partners.

The infamous private equity underwriter (PEU) raised $673 million for a new fund aimed at small buy-outs of European technology companies.

The new fund is due to announce its first investment later on Monday, acquiring the Gardner Group, a small UK-based aerospace technology group that supplies top aircraft makers, such as Boeing Co.

Thank heaven Hank Paulson's money has a chance of going to work. I bet hundreds of thousands of Americans hope for the same opportunity. Carlyle's latest conference call reveals how the PEU may benefit in other ways from the TARP. Big writedowns on Freescale Semiconductor and HD Supply turns their debt to untradeable junk. Debt holders turn it into Hank Paulson's TARP window, where Reubenstein and Conway can buy it back for pennies on the dollar, courtesy of the taxpayer's wallet. Patience is required, but Carlyle gets a government sponsored win, yet again.