Oaktree, BlackRock Plan Funds to Buy LBO Loans at a Discount

Discussion in 'Wall St. News' started by ASusilovic, Sep 28, 2007.

  1. Oaktree Capital Management LP, BlackRock Inc. and Eaton Vance Corp. are raising funds to purchase leveraged-buyout loans that banks are selling at a loss.

    At least 11 firms are seeking more than $12 billion as banks court buyers for more than $370 billion of debt they pledged to finance takeovers. Citigroup Inc., Credit Suisse Group and Deutsche Bank AG already have reduced prices on loans by as much as 4 percent to lure investors.

    Investment groups such as Los Angeles-based Oaktree Capital, which oversees $47 billion, and BlackRock in New York see a chance to profit because banks are stuck with loans they made before demand for below-investment-grade debt dried up in the past three months. The Standard & Poor's/LSTA Leveraged Loan Index fell 3.1 percent in July and August as record defaults on U.S. subprime mortgages drove investors away from all but the highest-rated securities.


    Opportunities, opportunities, opportunities... ;=)

    Have to add this funny part =>

    "Funds managed by Goldman and Lehman, both based in New York, may end up buying loans their firms made, and KKR may invest in debt used to finance its own LBOs, the people said."

    Ha, ha, ha....:D :D :D
  2. They were willing to pay a premium several months ago. Now they can buy them at a discount.