Fallout from Chuck Prince’s now infamous “We’re still dancing” remark on the leveraged buyout frenzy could be an invitation for others looking to enter the lucrative business behind LBO financing.

With Citi and others now reeling from large portfolios of risky loans imperiled by the credit crunch, less exposed banks may position themselves to fund the next buyout binge.

“With a dislocation of this size there can be a realignment of the business,” a leveraged finance banker commented. “There is an opportunity to raid people from rival banks and make a difference in league tables.”

Indeed HSBC, not considered a powerhouse in leveraged finance, last month hired Tom Cole and Dan Toscano as co-heads of its leveraged finance group in the Americas. Cole previously ran leveraged finance at Deutsche Bank, where Toscano headed the senior debt capital markets group.

And last week HSBC also decided not to sell down its debt exposure to the First Data buyout, which is about 20 percent of the overall $15 billion loan.

The move may have curried favor with KKR, which had clashed with banks over terms of the $26 billion buyout. HSBC declined to comment further on the moves, but the bank may find that next year it has no problem getting a date to the LBO prom.

(Image credit: www.boston.com)