US buyout firm Carlyle Group and its joint venture partner National Hire have proved there is still life in the private equity debt market in this country with the $2.2 billion purchase of Coates Hire. The acquisition price is 13.3 times the EBIT of the target based on June 2007 financials. On Tuesday, Carlyle and National Hire's joint venture vehicle, Ned Group Holdings, said it would raise some A$2 billion in senior debt from a syndicate of banks that include ABN Amro, ANZ, Westpac, Calyon, Mizuho and Sumitomo Mitsui. Goldman Sachs JBWere will underwrite $150 million of subordinated notes.Carlyle's Australian point man, Simon Moore, says Australia has been largely isolated from the impact of the sub-prime credit squeeze on international markets, but he felt that $2 billion was about as much as the Australian market could take just now.Moore - still chasing his first completed deal after the shareholder rejection of the $4.2 billion buyout of APN News & Media and his withdrawal from the Coles auction - has experienced the highs and lows of the private equity boom."If you look back to 18 months ago, people were thinking that $2-$3 billion transactions were very ambitious and people couldn't understand how they could be done," Moore said. "We've been to the dizzy heights of the debt market. If you look back six months we had challenging valuations and leverage going out of bounds. Now we are in a more moderate environment."Still, he said large transactions would be difficult in the current market, which he said had pushed the cost of acquisition debt in Australia up by about 50 basis points for fees and 50 basis points on interest margins."With the passage of time we are likely to see that those larger transactions will become doable again," Moore says. "But in the short term they are probably off the table. Right now we are just looking at transactions that local banks are more comfortable about - probably around the $2 billion mark."