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Reuters UK – Lenders to Eggborough, a large coal-fired power station, have exercised an option to acquire the plant, owner EDF said on Thursday.
The lenders, which include Bluebay’s distressed-debt fund, gained the right to acquire the 1,960 MW station through a restructuring of British Energy, acquired by the French utility at the beginning of 2009.
“EDF confirms that British Energy’s lending banks have exercised their option to acquire the Eggborough coal power station under the restructuring agreements made by the British government in 2005,” EDF unit EDF Energy said in a statement. The news was earlier reported by the Financial Times.
West Palm Beach (HedgeCo.net) – Singapore hedge fund manager, 3 Degrees Asset Management, is launching ADF Prime Ltd, a credit opportunities fund that will invest primarily in the performing debt obligations of Asian companies that have been mispriced as a result of the Global Financial Crisis.
3 Degrees also manages the award winning Asian Debt Fund, an Asian distressed debt fund that has been active since 2004.
In Asia, debt prices have corrected far more sharply than in the US and Europe. This is driven by technical factors, the fund manager says, as Asian investment banks unwind their portfolios, global hedge funds close their Asian operations, and capital is generally pulled from the region.
The new fund will capitalize on the systemic inefficiencies endemic to Asian credit markets. Due to the limited number of players, and the highly relationship‐driven nature of Asian markets, inefficiencies are being exaggerated by the global financial crisis.
Targeting quality companies that either have, or can generate, enough cash flow to repay maturing debt without dependence on capital markets, the fund seeks annual, unlevered net returns in excess of 25%.
3 Degrees has received numerous awards, including “Best Asian Distressed Debt Fund” and “Best Singapore Hedge Fund”. In 2007, Moe Ibrahim, the founder, was selected as one of 20 Rising Stars of Hedge Funds by Institutional Investor. ADF Prime will be co‐managed by Moe Ibrahim and Jeff Tolk.
ADF Prime is also available to institutional investors and ultra high net worth individuals via the Firm’s Managed Accounts platform.
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Boston Globe – Despite the gloom gripping the markets, Bain Capital has raised $475 million for a new venture capital fund, according to two executives with direct knowledge of the fund.
It is the firm’s fourth fund that invests in start-ups. Bain is perhaps best known for its multibillion-dollar private equity deals. The Boston firm manages about $70 billion total, including a hedge fund and a debt fund that it runs.
Telegraph.co.uk – Industry sources say private equity and distressed debt specialists have raised about $26bn (£17bn) since the start of October, with some 80pc coming from hedge funds.
Distressed debt funds, which buy debt that is trading at a discount because the borrower is at risk of defaulting, have been around for years but specialists are looking forward to a bonanza year in 2009.
Among the biggest distressed debt fund raisings since October have been Oaktree, which has secured $10.5bn, Towerbrook with $2.75bn, Intermediate Capital with $1.5bn, and Alchemy with $1bn. Hedge funds are also aiming to buy distressed debt directly from banks that are under pressure to offload liabilities to shore up their balance sheets.
Secondary debt, even senior loan notes, often trade below 70p in the pound and yield 25pc over five years if the debt is held – and survives – to maturity. If a company is strugglings with its covenants, debt holders can strike debt-for-equity swaps in return for keeping a company afloat – often a cost effective way of getting a seat at the table or control of a business.
