Cheyne strives to delay $6.6B asset sale

Cheyne Capital Management is asking structured investment vehicle investors to refinance to put off an enforced asset sale, published reports said. Cheyne Finance, the $6.6 billion London-based hedge fund’s SIV, had its credit rating slashed by Standard & Poor’s on Tuesday as the value of its assets fell, leading to an enforced liquidation InvestmentNews, Aug. 29. SIVs, funds that sell short-term debt or commercial paper to investors, have been the latest vehicles hit by the collapse subprime-mortgage markets. Now, Cheyne is asking investors to agree to a refinancing to put off the sale, according to The Independent. Another casualty of the deteriorating commercial paper market, Cheyne Finance has arranged $300 million in funding facilities from the Bank of New York, Merrill Lynch and Denmark’s Danske Bank to pay off liabilities until the end of November, according to The Independent. The hedge fund hopes to refinance the commercial paper into longer-term debt and has told its investors that it was in their best interest to wait for the market conditions to correct themselves instead of forcing a fire sale of assets, The Independent said. Asset values in SIVs are now plummeting as investors shy away from commercial paper.