Heard about the $3bn Lehman rights issue? What about the $3bn Lehman structured debt issue?
Almost, anyway. Lehman is preparing to issue a $2.8bn Collateralised Loan Obligation, according to Total Securitization. A leveraged loan clearout then.
If true, the CLO - Freedom 2008-1 - will go someway to shifting more of Lehman’s $10.9bn of “contingent commitments” to LBO debt reported in the bank’s first quarter figures.
On which note, it’s worth tangentally picking up on the fact, as Felix Salmon does at Market Movers, that Lehman has just had a great deal of pressure relieved from such commitments by the collapse of Vale’s putative bid for Xstrata. Lehman stuck out as the only pure investment bank in the financing consortium and was, as a lead manager, in hock to the tune of $5bn.
If I was Lehman CFO Erin Callan, I’d be breathing a huge sigh of relief right now that the Vale-Xstrata deal has fallen through and I don’t need to write that $5 billion check, even if it did come with hefty advisory fees attached.
Back to the CLO, however, and one thing which is of particular relevence is a rumour doing the rounds about another CLO coming to market recently - the $450m Carlyle Credit Partners Financing 2008-1. In order to complete syndication, it fell upon Carlyle Investment Management to buy the equity tranche. So what price for Freedom?
All of this - equity issue and CLO, is, of course, on top of the $2bn revolving credit facility arranged just two weeks ago for Lehman.
In total, then, $8bn raised in the last fortnight. Not bad. And without any real fanfare.
All purely coincidental future-proofing, of course. Nothing to do with current market conditions.
