Friday, 30 January 2015
Last updated 4 hours ago
Feb 9 2012 | 3:59am 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.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…