Has Boots-KKR burst the private equity bubble?

The debt-laden purchase of Alliance-Boots by KKR, coinciding with a sharp rise in investors’ risk premia, has become a test case for the ability of private equity - and its bankers - to withstand a liquidity squeeze.

Against a background of rising interest rates, the private equity acquisition of pharmacy and retail chain Alliance-Boots – the first of a FTSE-100 company – has become a test of creditor faith in highly leveraged acquisition.

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