LONDON, Aug 5 (Reuters) - Creditors of structured investment vehicle Sigma Finance have appointed advisors and may join forces to discuss the future of the $30 billion fund amidst concerns about Sigma’s abilities to pay its debt.
Joint advisers accountancy firm Deloitte [DLTE.UL] and law firm Orrick will lead a conference call on Thursday, said Mark Fennessy, partner at Orrick in London.
“The purpose of the call is to listen to what investors have to say, and if appropriate, to form a creditors’ committee,” Fennessy told Reuters on Tuesday.
Sigma, a structured investment vehicle (SIV) managed by London-based investment company Gordian Knot, has about $8.6 billion of debt that must be refinanced by Sept. 30, according to Moody’s Investors Service.
Banks took heavy hits when the credit crisis hurt the value of assets held in SIVs, off-balance sheet vehicles they used to raise their financing power and that often included highly toxic U.S. subprime-related loans.
Sigma is the largest non-bank sponsored structure of this type, though it has different features to many SIVs.
In July, Moody’s credit rating agency cut Sigma’s long-term debt rating by one notch to “A3”, the seventh-highest investment grade, from “A2”, and left it on review for another possible downgrade, citing volatility in the credit markets.
Since disruptions in the commercial paper and medium-term notes markets, Sigma has relied on repurchase agreements, ratio trades and asset sales to pay maturing debt, Moody’s said.
Other SIVs, such as Cheyne, Rhinebridge and Whistlejacket, have already filed for administration and have been — or still are being — restructured.
Sigma’s assets are less toxic than in some other SIVs. They include about 60 percent of bank paper, whilst the more risky Collateralised Debt Obligations (CDOs) account for 20 percent, a recent research note by Citigroup said.
Editing by Rosalba O'Brien