The slow and painful process of restructuring the various structured investment vehicles in receivership inched forward last month with details emerging on plans for the Cheyne portfolio and news that Blackrock may take over as replacement manager on the stricken Whistlejacket vehicle. These are two of five SIVs in receivership that Goldman Sachs is restructuring, the others being Avendis’s Golden Key, Solent Capital’s Mainsail and IKB’s Rhinebridge vehicles. Receiver on four of the restructurings is Deloitte, with KPMG handling Mainsail.
Blackrock’s rumoured appointment as alternative investment manager for Whistlejacket follows Standard Chartered’s decision not to stand behind the vehicle. While many other banks, such as Citi, HSBC and Dresdner, have taken SIV assets on balance sheet, StanChart, which had $250 million invested in Whistlejacket capital notes but took its money out via a vertical slice, took the decision that the cost of supporting the vehicle was too great.
The challenge with restructuring any SIV is the establishment of the best price for the assets and to avoid the sale of the entire portfolio. The route that Goldman has taken involves creditors having the option to either sell the assets for cash and crystallize their loss or accept pass-through notes to a new vehicle that Goldman will establish in the hope that some of the lost value, resulting from depressed prices for ABS, can be recovered.
