At some point in the last few weeks, bankers say that Citigroup Chief Chuck Prince paid a visit to the office of Henry Kravis over at 9 West, a few blocks south of Central Park. It’s unclear who, if anyone, was in the room with them.  But the meeting, if not merely Wall Street gossip, is symbolic of the rise and fall of private equity’s “golden era,” as Kravis coined it.

It’s symbolic in that it underscores just how tense things are between LBO deal makers and Wall Street. KKR has more hung loans out there than any other buyout shop, and Citi underwrote most of them. The extent of Citi’s LBO exposure was revealed on Monday when the bank delivered earnings and said it was taking a $1.4 billion pre-tax write-down from leveraged loans it couldn’t sell.

The PR folks for KKR and Citi declined to comment about the meeting. Sure, CEO’s probably talk to private equity heads all the time. But this wasn’t a golf outing, a charity event nor a New York society event.  This was apparently a deliberate pow-wow, a meeting of the minds, a “so what do we do now” kind of thing.

And it’s significant that this wasn’t just any meeting between a CEO and a private equity head. This was a meeting between the CEO of the biggest Wall Street bank and the most famous private equity guy on the planet (sorry Schwarzman, but Kravis essentially invented the buyout biz).

So what time did they meet?How long did it last? What did they eat? Drink? We’ll leave that up to your imagination. But the topic of conversation probably centered on the amount of loans Citi is jammed up with courtesy of several KKR deals. KKR has taken a firm stance on financing terms, refusing to give in to the banks’ demands.  Banks want buyout shops to add covenants, bump up interest payments, and ditch some loose lending allowances in order to attract wary debt investors. Will KKR budge? Doubtful.

One topic may have been a possible joint effort where KKR helps Citi offload the debt through some sort of investment vehicle. The Financial Times reported this week that the two were talking about such a proposition, but it seems as though the discussions weren’t going very far, according to the paper.

What exactly transpired between King Henry and Prince is anybody’s guess. But it’s heady times on Wall Street right now. No doubt there was plenty to discuss.

(Photo: Reuters file)