Deutsche Bank Loses Spot on NXP IPO

NEW YORK (Reuters) – Deutsche Bank AG (DBKGn.DE) lost its spot underwriting Kohlberg Kravis Roberts & Co’s initial public offering of Dutch semiconductor company NXP BV because it refused to renew a line of credit for the company, a source said on Tuesday.


Private equity firm KKR had asked Deutsche Bank to renew a $60 million line of credit to NXP as a condition for being an underwriter on the deal, said the source, who was close to the negotiations. The source declined to be named, citing confidentiality agreements.


The source said Deutsche Bank’s decision not to renew the credit line was made by the underwriting committee and that underwriting fees would not have covered a potential loan loss.


NXP is owned by private equity firms including KKR, Bain Capital, Silver Lake Partners, Apax and AlpInvest Partners N.V., which bought just over 80 percent of the company from Philips Electronics (PHG.AS) in 2006, according to NXP’s website.


NXP makes semiconductors used in the automotive, industrial, and consumer industries, among others.


Deutsche Bank and KKR both declined to comment.


The story was first reported by the New York Post earlier on Tuesday.


The IPO would be worth about $1 billion, according to media reports. The reports said other underwriters currently under consideration include Barclays PLC (BARC.L), Goldman Sachs (GS.N), JPMorgan Chase & Co (JPM.N), Morgan Stanley (MS.N), and Credit Suisse AG (CSGN.VX). None of the banks were immediately available for comment.


(Reporting by Clare Baldwin, additional reporting by Megan Davies; Editing by Phil Berlowitz)