Deal Struck on Cheyne Finance Refinancing

LONDON (Reuters) - An agreement has been reached on the sale of Cheyne Finance, a structured investment vehicle now known as SIV Portfolio, to bidders including Goldman Sachs (GS.N), the fund's receivers Deloitte & Touche said on Monday.

The $7 billion SIV Portfolio, managed by British hedge fund Cheyne Capital Management, went into receivership in September after drawing down liquidity lines to help repay maturing debt.

"The receivers of SIV Portfolio Plc ... have today announced that they have reached agreement on non-binding heads of terms for the sale of the entire investment portfolio held by the company to Goldman Sachs International and/or alternative bidders," Deloitte & Touche said in a statement.

The agreement follows talks with a number of different bidders over the past few weeks and consultation with the informal creditors' committees, Deloitte said.

Under the non-binding terms, certain reinvestment opportunities will be offered to some existing creditors of the company.

"All parties continue to negotiate toward reaching a binding agreement and finalising documentation," Deloitte said.

SIVs, held by banks, hedge funds or other institutions, issue a mixture of short-term debt and capital and buy longer-term assets, which may pay more interest than the amount they pay on their notes.

The vehicles hit trouble in August when liquidity in the credit markets dried up as investors faced exposure to the U.S. subprime market. That prevented SIVs from raising funds and also caused the value of their assets -- mainly bank debt and asset-backed securities -- to drop.

(Reporting by Natalie Harrison; Editing by Quentin Bryar)