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Golden Key Ltd. - SIV (incl. MBS)

2007-10-10

Count of distinct funds: 1
Capital base: ?
Loss: ?

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stories: bloomberg.com

We have this SIV fund on watch as its restructuring is pending. Some details on its predicament (from Oct. 4 2007):

Golden Key, based in the Cayman Islands, was set up to raise money in the short-term debt markets to invest in bonds with longer maturities and higher yields such as mortgage-backed debt. Investors refused to buy notes sold by SIVs on concerns they included U.S. subprime securities.

Blackstone Group LP is seeking investors to help refinance Golden Key Ltd., the structured investment vehicle that was forced to sell assets to pay creditors.

...

Barclays Plc helped set up Golden Key two years ago. Golden Key is in talks with Barclays in London to resolve a dispute over the ``purported drawdown'' of funds set aside as a liquidity backstop, the statement said, without providing detail.

Standard & Poor's slashed some of Golden Key's debt ratings to high-yield, high-risk from AAA in August after investors refused to buy its short-term debt. The rankings were cut by as many as 17 levels to CCC.

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Important: This fund is on our list of hedge funds that are apparently ailing or which we think are worth watching for any other reason. Ailing funds haven't shut down, but they've suffered significant value declines and/or temporarily halted redemptions. Funds on watch may not even have unusual declines, but may be posted if it is felt there may be risk of developing a more serious condition eventually.