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$268 Million BWIC On Deck, Another Credit Fund Casualty

Tyler Durden's picture




 

An "anonymous and confidential" seller (aka imploded smallish credit hedge fund) has bitten the bullet and is circulating a $268 million BWIC consisting of 84 loan tranches. The largest pieces in the BWIC include a $9.2 million Term B by Select Medical, $8.5 million TL from Cambium, $8.3 million TL from Envirosolutions, $7.8 million TL from Clientlogic, and a bunch of other CIT and GECC specials, including a $6.1 million TL by BCBG Max Azria. According to LCD News, total BWIC volume year to date has hit a paltry $3 billion, likely a function of loan values skyrocketing as a result of the continued parabolic high beta, garbage stock move in equities.

Full list attached.

 

 

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Tue, 08/25/2009 - 13:08 | 47602 pivot
pivot's picture

how do you blow up now? you made it through the tough part already.

Tue, 08/25/2009 - 13:14 | 47612 Anonymous
Anonymous's picture

that's not entirely accurate... wait for the second wave

Tue, 08/25/2009 - 14:37 | 47723 pivot
pivot's picture

agreed, but its weird to do a bwic into a strong mkt.  they can't / haven't been able to sell any of this stuff and now are flushing the whole thing?  its weird

Tue, 08/25/2009 - 13:14 | 47610 amarshall
amarshall's picture

For other idiots like me...

http://www.investopedia.com/terms/b/bwic.asp

Tue, 08/25/2009 - 13:19 | 47620 Anonymous
Anonymous's picture

thanks. I guess I qualify

Tue, 08/25/2009 - 14:20 | 47691 I need more cowbell
I need more cowbell's picture

Dude, ZH has me flying all over the internet trying to keep up. This is the best thing here, no dumbing down- I have been forced to learn more here than in 4 years of university.

Good tunes too.

Tue, 08/25/2009 - 13:18 | 47617 wes9876
wes9876's picture

$5.5mil of Fountainebleu LV

Tue, 08/25/2009 - 13:26 | 47631 Anonymous
Anonymous's picture

CalPERS just walked away from a CRE office building in Portland. Bought it in 2007. CalPERS is hurting, but far from broke. If they're just giving stuff to the bank, than anyone will.

Institutions are going to start dropping junk and get their balance sheets back to reality, even if the banks refuse to.

Tue, 08/25/2009 - 14:43 | 47729 Gilgamesh
Gilgamesh's picture

And yet CalP is buying into CRE again; trying to double-down on a 6, I guess.

Tue, 08/25/2009 - 13:28 | 47633 gmak
gmak's picture

Possibly a forced liquidation from a significant client of the fund. i.e. "Give us our money back, or else".

 

Maybe management wants out..... [lol]

Tue, 08/25/2009 - 13:45 | 47658 Anonymous
Anonymous's picture

thanks that is great info 0 hedge still way ahead of everyone....

Tue, 08/25/2009 - 14:18 | 47684 Anonymous
Anonymous's picture

How do we know for sure that the manageris a single fund blowing up? couldn't it be a bulge bracket asset mgr doing some housekeeping?

Tue, 08/25/2009 - 14:31 | 47713 Anonymous
Anonymous's picture

i guess that's what happens with portfolio marginging....and for the individual investor, that's not Reg T (1x1) leverage, institutional leverging is 1x5/6...my guess is those securities are "leverage" worthy...maybe not a full 1 but at least a .5

Tue, 08/25/2009 - 15:00 | 47747 Anonymous
Anonymous's picture

with 8-12x leverage the equity is still a zero so this wouldn't be a client asking for money back, the money is already gone for the equity investor. It could be that a lender has been allowing them to operate out of compliance hoping the market would come back a bit, now that it has they are getting out with a minor loss before the loan market crashes again.

Tue, 08/25/2009 - 15:09 | 47762 Anonymous
Anonymous's picture

non-event. so much cash chasing secured loans right now that this BWIC will get absored no problem.

Wed, 08/26/2009 - 03:07 | 48517 i.knoknot
i.knoknot's picture

Absorbing this BWIC? sure, but that's not the point. The forerunners of a tsunami are only a foot high, but have a lot of momentum.

Tue, 08/25/2009 - 16:22 | 47920 Anonymous
Anonymous's picture

More likely than a fund blowing up, this is a fund taking advantage of strength in the loan market and selling at an opportune time. If this thing were highly levered and bought before the beginning of this year, it would already be gone.

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