How KKR Beat Citi in Loan Deal for Perelman’s Humvee Maker
by Sridhar Natarajan and Nabila Ahmed
When Citigroup Inc. started hawking $300 million of loans for the maker of the Humvee, investors were willing to buy almost any deal for sale. Almost. Even after three weeks of talks, investors looking under the hood of AM General LLC weren’t convinced they wanted to lend to a company heavily reliant on one product, the famed military combat vehicle. As the Citigroup deal foundered, AM General’s owner — a firm controlled by billionaire Ron Perelman — decided to switch tack in November, abandoning one of the biggest underwriters in the loan market for a much smaller rival: the debt sales team of KKR & Co. … “Being able to play with their own money and actually buy into the deals is a significant advantage these companies have over banks,” said Karen Shaw Petrou, co-founder of Washington-based Federal Financial Analytics.