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The banks holding the leveraged debt financing for reality television producer Endemol NV are taking a big cut on the sale of the $1.7 billion in loans that financed the deal. The loans could sell at prices as low as 70 cents on the dollar. But Barclays Capital, which also underwrote the debt, declined to participate in the sale.
Bloomberg reports that:
Goldman Sachs Group Inc. [ and Credit Suisse Group, Royal Bank of Scotland Group plc, Lehman Brothers Inc. and Merrill Lynch & Co.] sold $1.7 billion of the high-yield debt this week for as little as 70 cents on the dollar, said three people with knowledge of the deal, who declined to be identified because the sale is private. London-based Barclays, the U.K.'s third-largest bank, has avoided writing down loans to companies that it says are "performing well."Former Italian prime minister Silvio Berlusconi's media group Mediaset SpA, John de Mol's Cyrte Investments BV, and Goldman Sachs Capital Partners bought 75% of Endemol, producer of reality television show "Big Brother," for $3.59 billion in May 2007. The banks lent $2.2 billion to finance the deal, only to see their ability to syndicate the debt disappear when the credit crunch began last summer. Already facing massive write-downs from subprime-related loans, banks have been willing to sell leveraged buyout debt at cut-rate prices to get it off their books. After the recent resolution of the Clear Channel Communications Inc.'s, buyout, banks were selling portions of the debt at 90 cents on the dollar. Deutsche Bank AG and Citigroup Inc. have been shopping for buyers so they could sell as much as $20 billion and $12 billion, respectively, in LBO debt at a loss. However, only Goldman Sachs sale of €100 million ($158 million) of the senior leveraged debt of Bavaria Yachtbau GmbH at the rock-bottom price of €0.65 on the euro to unnamed hedge funds matches the Endemol prices. -- George White See Bloomberg story See story on Endemol buyout on The Deal.com See Dealscape post on Clear Channel See Dealscape post on Citibank debt sales See Dealscape post on Deutsche Bank debt sales Categories Deal Video
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