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Lehman Brothers: $1.54 billion Bankhaus note purchase, $90 million Quadrant share sale OK'd
By Lisa Kerner
Charlotte, N.C., March 23 - Lehman Brothers Holdings Inc.'s two note purchase agreements with the insolvency administrator of Lehman Brothers Bankhaus AG were approved, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.
Under the agreements, Lehman would purchase $1.54 billion of notes from Bankhaus for a total purchase price of $957 million.
As previously reported, the notes were issued by special purpose entities SASCO 2008-C2 Ltd., Spruce CCS, Ltd. and Verano CCS, Ltd. The issuers bought real estate, commercial loans and equity positions from the Lehman debtors and issued the notes, which were secured by the assets and related cash flow.
Some of the notes were sold to Bankhaus by the Lehman debtors under repurchase agreements.
Also on Wednesday, the court approved Lehman's sale of 80,000 class A voting participating shares of Quadrant Structured Products Co., Ltd. for $90 million to Quadrant, according to an attorney familiar with the case.
Lehman said previously it formed credit derivatives product company Quadrant with Magnetar MQ Ltd. in October 2007.
In return for an investment of $80 million, Lehman received the 80,000 class A shares, representing a roughly 20% equity stake.
Magnetar contributed $320 million in capital to Quadrant for which it received an 80% interest in the form of 320,000 class A shares.
New York-based Lehman Brothers Holdings Inc. was the fourth-largest investment bank in the United States. The company filed for bankruptcy on Sept. 15, 2008. Its Chapter 11 case number is 08-13555.
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