MFS Creditors Warn of £930 Million Shortfall From Double Pledges скачать в хорошем качестве

MFS Creditors Warn of £930 Million Shortfall From Double Pledges

Constantine Courcoulas, Bloomberg News Distressed Debt Reporter, discusses the latest credit blowup in London that has Wall Street on edge. Some creditors of Market Financial Solutions Ltd., the failed UK mortgage firm backed by Wall Street lenders including Barclays Plc, warned there may be a £930 million ($1.3 billion) shortfall in collateral backing their loans.  Zircon Bridging Ltd. and Amber Bridging Ltd., the companies that forced MFS into a UK form of insolvency this week, accused the London-based firm of using the same assets as collateral for multiple loans. This practice, known as double pledging, may have led to an “unaccounted-for deficiency” of more than 80% on £1.2 billion of debts, according to documents from their claim obtained by Bloomberg. The collapse of MFS, which also attracted backing from Apollo Group Inc.’s Atlas SP Partners unit and Jefferies Financial Group Inc., is the latest crisis to hit both banks and direct lenders, and puts a spotlight on asset-based financing. Accusations of double pledging also emerged in the collapses last year of US auto parts supplier First Brands Group and sub-prime auto lender Tricolor Holdings. Paresh Raja, the owner and chief executive officer of MFS, didn’t respond to requests for comment through his LinkedIn profile. Lenders typically provide mortgages for less than the value of the assets backing them, meaning the collateral is worth more than the debt issued. Angela Gallo, a lecturer in finance at Bayes Business School in London, said collateral in transactions such as those arranged by MFS tends to be worth between 105% and 120% of the loan. “To put it bluntly, having only £230 million against £1.2 billion in debt is catastrophic,” said Gallo. “This definitely looks like a mess.” It’s too early to tell what the eventual losses — if any — will be for creditors of MFS. AlixPartners was appointed to oversee the insolvency this week and has just begun its work. -------- Watch Bloomberg Radio LIVE on YouTube Weekdays 7am-6pm ET WATCH HERE: http://bit.ly/3vTiACF Follow us on X:   / bloombergradio   Subscribe to our Podcasts: Bloomberg Daybreak: http://bit.ly/3DWYoAN Bloomberg Surveillance: http://bit.ly/3OPtReI Bloomberg Intelligence: http://bit.ly/3YrBfOi Balance of Power: http://bit.ly/3OO8eLC Bloomberg Businessweek: http://bit.ly/3IPl60i Listen on Apple CarPlay and Android Auto with the Bloomberg Business app: Apple CarPlay: https://apple.co/486mghI Android Auto: https://bit.ly/49benZy Visit our YouTube channels: Bloomberg Podcasts:    / bloombergpodcasts   Bloomberg Television:    / @markets   Bloomberg Originals:    / bloomberg   Quicktake:    / @bloombergquicktake