Man Utd debt up for sale
Man Utd captain Rio Ferdinand. Photo: Matthew Peters/Manchester United via Getty Images
Tuesday October 21 2008
Debt used to finance the takeover of European champions Manchester United is included in a list of $341 million of buyout loans offered for sale today.
Sankaty Advisors LLC, an investment unit of Boston-based private equity fund Bain Capital LLC, is selling the loans, Standard & Poor's LCD reported. The Manchester United debt totals 8.8 million pounds (€11.4 million), according to a sale list obtained by Bloomberg News.
Prices of loans rated below investment grade that funded leveraged buyouts in Europe are at record lows as the credit crisis forces investors to unload assets acquired with borrowed money. Manchester United, bought in 2005 by the U.S. Glazer family for $1.4 billion, owes creditors about 660 million pounds, according to data compiled by Bloomberg.
''Forced selling and talk of significant redemptions in the hedge fund industry is bearing down on the loan market,'' said Gunnar Stangl, head of index strategy at Dresdner Kleinwort in Frankfurt. ''Prices won't rebound soon. I wouldn't be surprised if the forced selling continues the rest of the year. You have to be prepared for even more depressed prices.''
Jonathan Desimone, managing director for Sankaty, wasn't available when called at the company's London offices by Bloomberg today. The company invests in leveraged loans, high- yield bonds and distressed debt and has about $33 billion ''in committed capital,'' according to its Web site.
Big Brother
The sale also includes loans to 35 companies such as Endemol NV, the producer of the ''Big Brother'' TV series and U.K. bingo hall operator Gala Coral Group Ltd., according to the list.
The Markit iTraxx LevX index, a benchmark credit-default swap index used to hedge against losses on European leveraged loans, dropped to a record 83.41 from 86.75, according to Markit Ltd. prices at 12 p.m. in London. The current series of the index started trading at 99 on Sept. 29.
The decline in loan prices is threatening funds that were set up to buy the assets. Highland Capital Management LP is shutting its flagship Highland Crusader Fund and another hedge fund after losses on high-yield, high-risk loans and other types of debt, a person with knowledge of the decision said yesterday.
Leveraged loans are rated below Baa3 by Moody's Investors Service and BBB- by Standard & Poor's and are used to fund private-equity acquisitions. (Bloomberg)
- Neil Unmack and Cecile Gutscher
