That the credit market climate has changed from a quarter ago is not news. That the new environment is imposing changes on even the most-preferred deals is, perhaps.

There's word that Kohlberg Kravis Roberts & Co. will most likely make concessions to banks in order to facilitate the $24 billion in debt needed to purchase First Data Corp (NYSE: FDC). FDC traded up 17 cents to $33.46 Tuesday at mid-day. KKR is buying credit card processor First Data for $34 per share. KKR's bid to take FDC private for that price is considered high because the bid is 14 times FDC's cash flow.

According to people familiar with the deal negotiations, KKR agreed to maintain a certain level of earnings before interest payments, depreciation, tax and amortization in relation to senior debt, The Wall Street Journal reported (subscription required).

In the financial world, "contagion" is a Wall Street term that describes marketwide selling in one region of the world, for example in Tokyo or Berlin, that leads to selling in another region of the world, for example, in New York.

But contagion can take place within a market (or intramarket) as well, and that appears to be the case with private equity firm Kohlberg Kravis Roberts (KKR) and its initial public offering.

A repricing of risk sparked by renewed concerns regarding subprime mortgage defaults, as well as a moderate stance regarding the deployment of new capital, has produced more-conservative capital market conditions -- conditions that may prompt KKR to postpone its IPO.

KKR filed to go public on July 3 and planned to raise $1.25 billion. KKR had sought to follow in private equity firm Blackstone's (NYSE: BX) footsteps: in June Blackstone priced 133.33 million shares at $31 in a $4.13 billion IPO. BX's shares have since slipped to around the $26 mark.

More importantly, a new conservative tone has gripped the debt markets, and that mood has spilled into the initial stage equity market -- conditions that will make it harder for KKR to attract an adequate price for its shares, and quite possibly, prevent the company from moving forward with the IPO at this time.