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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.