Consider First Data--a huge LBO to be sure. The bridge loan for this Kohlberg Kravis Roberts deal has yet to even be funded because the deal has yet to close. When it is funded, it may be in place for longer than the banks providing it would like. But there is virtually no chance those banks walk away from this deal or that KKR walks away.
To do so would force the banks to pay the break up fee and open themselves up to serious litigation, not to mentions loss of reputation.
The same scenario is playing out in deals as diverse as TXU, Harman Internationaland Alliance Data. Each of those has traded down sharply on the perception that the deals are at risk given the current market environment.
If the economic environment were as bad as the current credit markets, maybe there would be cause for concern. But these companies are doing just fine. It's the lenders who may not be.
And that's why we are likely to see a significant slowdown in new go-private transactions. It's not even because banks won't consider lending to any new go-privates. It's because they will now do so with sharply higher pricing, sharply reduced leverage ratios and much stronger covenants.