Harbinger Takes $190 Million Loan

Feb 9 2012 | 4:59am ET

Harbinger Capital Partners is an awfully risky bet, according to its lenders.

The New York-based hedge fund, which has more than half of its assets tied up in LightSquared, a controversial wireless Internet venture currently in regulatory limbo, has taken out a $190 million loan from Jefferies Group. The new borrowing is less than half the $400 million in debt that Harbinger paid off at the end of last month, but it comes at a hefty price: a 15% interest rate, almost three times the average rate paid by junk-rated companies and more, even, than the average annual rate for credit card customers.

The recently paid-off loan, issued by UBS, carried a 10% interest rate.

The Jefferies loan, which netted Harbinger $160 million, matures on Oct. 31. The hedge fund will pay the interest monthly, with two $47.5 million prepayments due on April 30 and July 31.

The loan is secured by Harbinger's assets, with Jefferies getting the first crack at any proceeds from an asset sale.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...