Goldman Sachs Sells 'American Idol' Loan At Record Breaking Discount

american idol

Photo: AP Images

Bloomberg reports that Goldman Sachs and Australian bank Macquarie have sold a $200 million that backed Apollo’s 2011 buyout of American Idol’s owner, CKX Inc.The loan, a first-lien credit, was sold for 78 cents on the dollar, according to sources. Bloomberg writes that that is the “biggest so-called original issue discount for U.S. bank debt, according to Standard & Poor’s Leveraged Commentary & Data.”

For perspective, the article notes that the average price for similar debt in January was 98.14 cents on the dollar.

The sale is part of a larger move by the banks to reduce their exposure to a troubled company:

The loan sale allows the banks to reduce their exposure to CKX after the company failed to sell $360 million in bonds in July to pay for the $509 million buyout by Leon Black’s Apollo after credit markets weakened due to Europe’s debt crisis. The discount on New York-based CKX’s term loan follows a decline in viewership of the company’s “American Idol”, according to Michael Altberg, a credit analyst with S&P in New York.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.