KKR Acquires OSTTRA for $31 Billion Amid Market Volatility

KKR has completed the acquisition of OSTTRA, a post-trade services company, for a total of $31 billion. The acquisition was financed through a debt package of approximately $17 billion, arranged by Barclays, Citigroup, and KKR Capital Markets. This financing package includes both senior and subordinated debt, which is expected to be sold to investors in the capital markets. The acquisition of OSTTRA was highly competitive, with several Wall Street banks and private credit firms vying for the financing rights.

OSTTRA, a joint venture between the Chicago Mercantile Exchange Group (CME) and S&P Global, is based in London and provides a range of post-trade services in the foreign exchange, interest rate, and derivatives markets. These services include clearing, settlement, and reporting. The proceeds from the sale of OSTTRA will be equally divided between CME and S&P Global, reflecting the strategic importance of the company to both organizations.

This significant financing deal comes at a time of market volatility, with recent economic policies disrupting the stock market and dampening demand for new leveraged loans and high-yield bonds. Despite these challenges, the financing was successfully arranged, highlighting the confidence of the financial institutions involved in the stability and growth potential of OSTTRA. The deal underscores the ongoing interest in the post-trade services sector, which plays a crucial role in the efficient functioning of global financial markets.

In recent months, there has been a trend of refinancing loans provided by direct lending institutions through traditional banking channels. For instance, software company Kaseya Inc. refinanced $31.75 billion in loans through banks, and tax software provider Avalara, Inc. raised $25 billion from the leveraged loan market. These examples illustrate the dynamic nature of the financing landscape and the willingness of banks to support large-scale acquisitions and refinancing activities.