Bloomberg News

Aabar Gets $2.5 Billion Credit Line; Blackstone Starts Loan ETF

April 04, 2013

Aabar Investments PJSC, a unit of Abu Dhabi’s International Petroleum Investment Co., signed a $2.5 billion loan to refinance a deal maturing next month as Blackstone Group LP (BX:US) teamed with State Street Corp. to form an exchange-traded fund for purchasing speculative-grade loans.

Aabar’s facility comprises three- and five-year term portions, each with slices denominated in dirhams, dollars and euros, according to two people with knowledge of the matter, who asked not to be identified because the terms are private. The financing was increased from $2 billion originally targeted after lenders offered more funds than were sought, the people said.

The SPDR Blackstone/ GSO Senior Loan ETF, which began trading on the NYSE Arca today, will be managed by GSO Capital Partners, the credit investing arm of Blackstone, and State Street Global Advisors, a unit of State Street, according to a statement distributed by Business Wire.

The ETF, which is listed under the ticker SRLN, is the third such fund to be created to buy loans, Bloomberg data show. Invesco Ltd.’s PowerShares Senior Loan fund (BKLN:US), started two years ago as the first loan ETF, saw its market capitalization exceed $3 billion last week as investors pour money into funds buying bank debt as a shield against rising rates.

Pearl Diver Capital LLP, a London-based money manager, is raising its fourth fund to invest in collateralized loan obligations. PDC Opportunities IV will raise about $250 million before first closing by early May, Chandrajit Chakraborty, managing director and co-founder of Pearl Diver, said in telephone interview.

First Data

First Data Corp., the credit-card processor owned by KKR & Co., was asking for commitments today by noon in New York on $2.67 billion of loans it’s seeking to reduce borrowing costs, according to a person with knowledge of the matter.

Geo Group Inc. (GEO:US), a real estate investment trust specializing in correctional facilities, got $1 billion of bank debt to refinance its existing credit.

The price of loans rose to 98.35 cents on the dollar, the most since July 2007, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 Index.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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Companies Mentioned

  • BX
    (Blackstone Group LP/The)
    • $32.2 USD
    • -0.06
    • -0.2%
  • BKLN
    (PowerShares Senior Loan Portfolio)
    • $24.86 USD
    • -0.00
    • -0.0%
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