By just about any metric you can use, Spain is not doing well right now. Nearly 27% of the country is unemployed, their GDP continued to shrink in the last quarter, they have a credit squeeze that keeps interest rates far above the euro average and keeps new businesses from opening, and there are further slowdowns reported in consumer spending and declines in housing prices.

The country is in the middle of a deep recession that has led to austerity measures by the government, which have in turn led to protests and riots. Recently, Pedro Almodovar, celebrated Spanish filmmaker, warned that there is an increasingly violent mood in the country. “I think the country as a whole is worried about social unrest breaking out. I certainly am,” he said as Spanish unemployment hit a national record of 27% last week.

So the news that Kohlberg Kravis Roberts (KKR), owned and founded by Americans Henry Kravis and George Roberts, is stepping up to help one of Madrid’s most beleaguered business sectors is good news indeed.

KKR announced this week that they would be lending $420 million to Uralita SA, a Madrid company that specializes in construction materials. While the housing market isn’t doing well in Spain, they do have a growing market in Eastern Europe and Russia, but have not been able to get the funding they need to function.

Nat Zilkha co-head of KKR’s special-situations group explains the situation. “Within this, quote, “distressed” Spanish situation was actually a very, very good company that was saddled with a bad capital structure.”

Of course, the move is not entirely altruistic. It is a loan, after all, and KKR likely expects that with a little bit of help now the company will be able to rebound and pay the loan back within its seven year period. And, while Uralita has reported that KKR charged rates similar to Uralita’s existing bank and bond-market lending, it is likely that KKR charged a bit more than traditional bank lenders or bond markets would charge if they were lending.

Ryan Boucher is a student at Penn State interested in business, art, and culture. Follow his musings at

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