Wednesday, March 19, 2008

Goldman Selling Chrysler Debt for less than 80 cents on the Dollar

by Bill McBride on 3/19/2008 01:48:00 PM

From Bloomberg: Goldman, Lehman Slash Prices to Unload Backlog in Buyout Debt (hat tip mike)

Goldman Sachs ... is selling Chrysler LLC debt for less than 80 cents on the dollar ...

Goldman, Lehman Brothers Holdings Inc. and Morgan Stanley are among securities firms and banks holding $129 billion of LBO loans, down from $163 billion at the start of this year, according to Bank of America Corp. analysts ...
The article notes that some of the private equity firms are buying back some of their LBO debt. Getting these pier loans (bridge loans that went nowhere) off the balance sheet is a high priority for the investment banks and will free up capital for other investments - but this also means more write-downs this year.

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