APOLLO, SANKATY TO BID ON $4.3BN STANFIELD FUNDS
Apollo Management LP and Sankaty Advisors LLC are bidding on $4.3bn of high-yield, high- risk loans managed by Stanfield Capital Partners LLC, according to three people with knowledge of the situation.
Bloomberg reported on Thursday that Stanfield, a New York-based money manager, sought offers in February for the debt, which is packaged inside 12 collateralized loan obligations, said the people, who declined to be identified as the negotiations are private. Berkshire Capital Securities LLC is arranging the sale.
Credit managers such as Blackstone Group LP's GSO Capital Partners LP and Deerfield Capital Corporporation have acquired investment firms or debt funds this year seeking to capitalise on the recovery in the loan market.
Debt managers are more willing to sell as asset values have risen, said Citigroup Incorporated analyst, Mr. Ratul Roy in New York.
'Over the past nine months, loan prices have recovered as fewer companies are defaulting,' Roy said. 'CLOs are returning to profitability and that will prompt more transfers.'
Stanfield was founded in 1998 and is owned by Mr. Dan Baldwin, Christopher Jansen and Stephen Alfieri, with a minority stake held by XLCapital Limited.
New York-based Apollo and Sankaty, Bain Capital LLC's debt investment arm in Boston, are among firms that have bid for the Stanfield assets, according to the people.
Apollo spokeswoman, Ms. Kelly Nugent and Sankaty spokeswoman, Ms. Charlyn Lusk declined to comment. Stanfield's Baldwin didn't return calls seeking comment. Jennifer Sransky, a Berkshire spokeswoman, couldn't immediately provide comment.
Stanfield manages 11 CLOs, a form of collateralised debt obligation, which bundle leveraged loans and slice them into securities with varied ratings, according to its Web site. It also manages one so-called synthetic CLO, which uses derivatives tied to loans.The S&P/LSTA US Leveraged Loan 100 Index has gained 4.67 per cent this year after returning 52.2 per cent in 2009. That's increased the value of CLO securities and the fees paid to the managers, Roy said.
High-yield, high-risk loans and bonds are rated below Baa3 by Moody's Investors Service and lower than BBB- by Standard & Poor's. Leveraged loans are repaid first in bankruptcy, before bonds and equities.
Deerfield, in Chicago, last month purchased Charlotte, North Carolina-based Columbus Nova Credit Investment Management LLC, a loan manager with $1.8bn of assets. GSO purchased $3.1bn of assets of Callidus Capital Management LLC in January. The transaction closed April 1.