Sunday, September 12, 2010

Dubai World Holdout: Aurelius Capital

FT reported:

Aurelius Capital Management, a US distressed debt fund, is the only creditor of Dubai World not to have approved a restructuring agreement on the troubled conglomerate’s $25bn of liabilities, according to people close to the talks.

Dubai World said on Friday that it had reached a formal agreement to restructure a total of $24.9bn, which includes $10bn owed to the government, with more than 99.9 per cent of its creditors.

Dubai World's total indebtedness was reported as high as $39.9 billion by Reuters. FT went on to describe other Dubai debt restructurings:

Dubai World’s developer Nakheel is still separately negotiating with banks about its $10bn debts, and last week a unit of Dubai Holding – a conglomerate owned by Dubai’s ruler – announced that it was for a second time to defer the payment of a revolving credit facility, as it attempts to reach a wider settlement on as much as $20bn of debt.
As for Aurelius Capital, the distressed debt hedge fund was established in 2005 by Mark Brodsky and Adam Stanislavsky. They could've purchased Dubai World debt for as little as 55 cents on the dollar. Also, Aurelius may have held credit derivatives on DW debt. Would it be in relation to their holdings, a hedge? Or might they be a risky bet? That's not the kind of thing debt holders have to share.

Aurelius surfaced in regard to Ambac and Argentinian bonds. They hold an interest in Citadel Broadcasting and Visteon. Aurelius' most recent 13F-HR was filed in November 2009.

Of course Aurelius has investment vehicles in the Cayman Islands. Their dance with Dubai has a Caribbean World beat.