U.S. eases snag to Blackstone/Alliance deal - WSJ

NEW YORK, March 21 (Reuters) - A U.S. regulator's decision on Thursday could help resolve an issue that has hindered Blackstone Group's (BX.N: Quote, Profile, Research) leveraged buyout of credit-card transaction processor Alliance Data Systems (ADS.N: Quote, Profile, Research), the Wall Street Journal said.

The Office of the Comptroller of the Currency, in a conference call with the companies about the proposed deal, described the cap on the amount of money Blackstone would be required to provide as a backstop if Alliance Data's credit-card bank ever fell into financial trouble, the article said, citing sources familiar with the talks.

The regulator told the companies it would allow Alliance Data to set aside $400 million of collateral in case of any financial trouble with the credit-card bank.

Should Alliance Data fall into trouble and for any reason be unable to cover the collateral, Blackstone would be required to bring it back up to $400 million, the Journal said, citing a person close to the talks.

The arrangement would effectively cap Blackstone's exposure to the credit-card bank for the first time in the negotiations, the article said. It said the $400 million backstop would be in addition to Blackstone's original equity commitment of nearly $1.8 billion. (Reporting by Ransdell Pierson, Editing by Chizu Nomiyama)