Barclay Clan Refinances Greensill $ 200 Million Loan

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(Bloomberg) – The family-owned company of billionaire Barclay is trying to refinance a $ 200 million loan from Greensill Capital, a move that could potentially provide some relief for Credit Suisse Group AG funds that have invested in debt organized by a defunct specialized lender …

Shop Direct Holdings Ltd. is in preliminary negotiations to refinance Greensill’s debt, which was then sold to funds managed by Credit Suisse, according to people familiar with the matter. As of June 29, the loan had not been paid, according to Credit Suisse’s presentation to Bloomberg. However, the refinancing, which is expected in the coming days, will leave investors exposed to debt from Credit Suisse’s raised funds, the sources said.

The supply chain finance firm run by Lex Greensill crashed in March this year, forcing Credit Suisse to liquidate $ 10 billion from funds that had been invested exclusively in corporate loans sponsored by Greensill. Although Credit Suisse returned and refunded $ 5.6 billion to investors, the Zurich-based bank warned that there was still uncertainty about how much of the money it would eventually be able to repay. Some of Greensill’s clients, including steel mogul Sanjeev Gupta, are in the process of refinancing their debts, while others may default, which could lead Credit Suisse to turn to Greensill insurers for repayment.

The dissonance between the loans Greensill’s borrowers believed were getting and how they were sold to investors in Credit Suisse is at the heart of the industry scandal. Credit Suisse promoted its popular supply chain finance funds as one of the safest investments on offer because the loans they held were backed up by invoices that were usually paid within weeks.

But as the funds grew, most of the money was made available through Greensill against pending future invoices for projected sales. The business collapsed in March after Greensill lost trade credit insurance on many of its bills of exchange to less creditworthy borrowers.

Shop Direct’s decision to refinance its $ 200 million loan will be in addition to other steps the company has recently taken to address delinquent liabilities.

Shop Direct, owned by the British Barclay family, which also controls the British newspaper Daily Telegraph, had a mortgage on the property through Primevere Limited, which was funded by Credit Suisse. The property, known as Skygate and located near Derby, England, was sold last month for approximately £ 100 million ($ 138 million) to Blackbrook Capital, according to people familiar with the matter.

Credit Suisse and Shop Direct declined to comment, as did Greensill administrator Grant Thornton.

Redemption trigger

Shop Direct Holdings is the parent company of the Barclay family’s retail empire and is the ultimate owner of Primevere Limited and The Very Group. According to the company’s website, Very is one of the largest digital retailers in the UK with over 1,900 brands.

Direct in-store participation in one of Credit Suisse funds matches a term loan the company used for general corporate purposes, while the Primevere loan is linked to a mortgage signed to fund improvements to one of its main storage facilities, according to a friend. with materials and documents of the company.

The loan agreements between Shop Direct and Greensill included a clause that triggered an early repayment in case the lender became insolvent, the person said. Shop Direct reached a so-called suspension agreement with Grant Thornton after the collapse of Greensill meant they were technically failing, they said.

(The second paragraph clarifies that refinancing is expected in the coming days.)

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