Guggenheim Investments is offering to let affiliates purchase some of the depressed debt issued by its financing entity as bond values slide amid mounting scrutiny of billionaire owner Mark Walter, according to public filings and market data.
GIH Borrower Debt Drops Following Scrutiny of Mark Walter
The 1.18 billion dollar debt issue from GIH Borrower LLC, maturing in 2031, fell to 73 cents on the dollar this week, according to market pricing. The drop coincides with an expanding investigation into the business interests of Mark Walter, who owns Guggenheim Partners, the parent company of Guggenheim Investments.
Despite the market drop, the asset manager told lenders in a filing that it considers the GIH Borrower debt an attractive investment opportunity. Market data tracked by Bloomberg shows the bonds traded at approximately 77 cents on the dollar on Tuesday.
Affiliate Buyback Proposals and Investigation Details
Corporate debt can be reacquired through open market purchases, negotiated transactions, or tender offers when management views securities as undervalued or when underlying operations face debt-servicing pressures. Guggenheim’s outreach to lenders involves exploring whether corporate affiliates can step in to buy up portions of the distressed debt.
The scrutiny surrounding Walter’s business empire includes examination of loan notes originated by his insurance companies and funneled into other branches of his financial network. Representatives for Guggenheim did not respond to requests for comment regarding the disclosures and the ongoing investigation.
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