Blackstone is Taken Down By The Daily Show

Dec 4, 2013
J. Webster
Comments Off on Blackstone is Taken Down By The Daily Show

Blackstone bought a credit default swap on debt Codere (who run betting parlors in racetracks in Europe) owed to a third party, which means Blackstone would make money if Codere was late the payment of this debt.

Then Blackstone offers Codere a $100 million loan, with the condition that Codere pay the other money owed to the third party late. Yes, the same loan Blackstone had bet that Codere would pay late. Blackstone then collects over $15 million on the CDS since Codere was late on the payment of their loan. Can’t believe they pulled this off…from the Daily Show.

So I guess both companies make out alright, Blackstone gets a nice chunk of money, Codere gets a loan, and then the insurance company or the party who sold Blackstone the CDS, takes the punishment. But doesn’t Codere suffers for making a late payment, maybe their credit standing gets dinged….

Update: Here’s the Blackstone deal nicely explained by Dan Primack of CNN Money with comments from Blackstone.

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