Underwriters have postponed the sale of $3.1 billion in loans that would pay for the leveraged buyout of General Motors Corp.’s Allison Transmission unit, according to The Wall Street Journal.
Officials for Citigroup, Lehman Brothers and Merrill Lynch, which were planning to sell the loans, were met with a cool reception from potential investors, the newspaper reported.
Investors said the buyout of Allison is likely to proceed, but the snag demonstrates the increasing caution with which debt investors are approaching such deals.
GM agreed last month to sell the division on Indianapolis’ west side to investors for $5.6 billion. Allison, which makes transmissions for heavy-duty trucks, employs about 3,400 locally.