KKR-owned Alliance Boots’ bankers are understood to have reached an agreement in principle to sell at least £2 billion of the health and beauty chain’s debt to a private equity consortium comprising Apollo, Blackstone and TPG.

The deal will see about four of Alliance Boots’ eight-bank syndicate, including Deutsche Bank, Citigroup, Royal Bank of Scotland and Bank of America, offload the first tranche of its£9 billion leveraged loans.

According to The Daily Telegraph, a deal to sell some debt to KKR broke down yesterday, because KKR wanted to borrow back too much money from the investment banks funding the acquisition. The investment banks will lend the other private equity buyers about 80 per cent of the purchase price of the debt, but KKR was not willing to put up that much of its own cash.

This deal marks the first sign of improving credit market conditions.