Friday, 22 August 2014
Last updated 12 hours ago
Mar 22 2007 | 12:26pm ET
After holding talks about acquiring subprime mortgage lender Accredited Home Lenders, Farallon Capital Management agreed to provide a $200 million loan to help the troubled lender deal with a credit crunch.
The San Francisco-based hedge fund, the fifth largest in the world with $26 billion in assets under management, is Accredited’s third-largest shareholder, owning about 7% of the company. The five-year loan is secured by Accredited’s assets at 13%. If the company pays the loan off in the first year, Farallon also gets a 7% premium, worth $14 million.
In addition, Accredited will issue 3.3 million warrants allowing Farallon to buy shares at $10 apiece over the next decade (Accredited shares were trading at $12.29 at press time). The warrants represent approximately 13% of Accredited’s current shares outstanding.
Farallon said in regulatory filings that acquisition talks occurred “within the last 10 days” and may be revived.
Farallon isn’t the only hedge fund heavyweight to take an interest in Accredited: Chicago-based Citadel Investment Group said yesterday it has taken a 4.5% stake in the San Diego-based lender.
Aug 4 2014 | 7:42am ET
By now, U.S. and international subscribers have received their home or office delivery of the special 500th issue of Futures magazine. You can too!—a very special offer follows. The issue is the largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders. Read more…
The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.
The Alpha Pages Editor's Note