The once-feared Golden Godfather has been contemptuously slapped again by investors. This latest news comes as the bank tries to unload credit crunch-damaged leveraged loans.
Banks led by Goldman Sachs Group Inc. plan to sell loans used in the leveraged buyout of Endemol NV, the Dutch television producer of “Big Brother,” for as little as 72.5 cents on the dollar, said four people with knowledge of the deal.
Just last April Goldman was humiliated into giving investors the largest discount ever by an investment bank to sell loan used in the leveraged buyout of yachtmaker Bavaria Yachtbau GmbH, at 65 cents in the euro. The current discount is at 27.5% so it looks like the bank is at least moving in the right direction.
“A company with loans priced below 90 cents on the dollar used to be considered distressed,” said Eric Tutterow, a managing director at Fitch Ratings in Chicago. “Banks have been very aggressive in selling large blocks of loans at a discount.”
On the write-downs front, the Golden one is projected to cut $9B of write-downs three ways with Morgan Stanley and Lehman Brothers.
Fox-Pitt Kelton forecast $9 billion in gross write-downs for “problem assets” of Goldman Sachs Group Inc , Morgan Stanley and Lehman Brothers Holdings Inc.
When this happens to Goldman Sachs, it’s a stark indication that no one will be left untouched by the credit crisis; there will only be a few survivors.