2008-04-14: Goldman Sachs is being strong armed by investors, mostly hedge funds in it’s attempt to offload loans linked to a highly leveraged buyout of buyout of Bavaria Yachtbau GmbH, one of Europe’s largest yachtmakers, last June. But with the weight of the credit crunch sitting like a heart attack on Goldman’s chest the bank is in a frenzy to get rid of it.
Now Goldman Sachs has agreed to sell €100 million of the senior debt at 65 cents in the euro. The bank, which declined to comment, has been marketing the deal and took investors, mainly hedge funds, to meet the group’s management in a bid to persuade them to buy the debt. Sources said that there were doubts about the health of the yacht manufacturer as some of its customers – bankers and hedge fund managers – have been hit by the credit crunch.
Goldman is not alone. It’s so bad the banks make no pretense at hardballing for the best price.
The discount is an example of what banks are prepared to do to shift high-risk leveraged loans off their balance sheets. “They’re prepared to crystallise losses just to get this stuff off their books,” one banker with knowledge of the deal said.
Goldman Sachs has been the one bank that has managed to gallop thorough slaughter the credit crisis brought to lesser mortals, but now they are pushing Goldman around too. Now if Goldman Sachs can be forced to give investors deepest discounts what do you think they will do to the other banks? I have a clue that it won’t be pretty.