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DealBreaker Awards: An Early Winner!SIV Portfolio Wins For Honesty

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We’re gearing up for our annual DealBreaker of the Year award here. (Send nomination to But we’ve found an early candidate for the smaller—much smaller, given the recent behavior of Wall Street’s banks and brokerages—category for the award in “Truth In Advertising.”
The award for the most honest name in finance today goes to the freshly renamed SIV Portfolio plc. Sadly, it is not Citigroup that has renamed itself. Rather, Cheyne Finance plc, which is currently in receivership, has shucked off its former name in favor of the bolder SIV Portfolio.
Cheyne Finance, which was managed by the prestigious London hedge-fund group Cheyne Capital Management (UK) LLP, ran into trouble this summer as investor’s lost their appetite for SIV debt. They began selling battered mortgage assets to repay debts after drawing down credit lines from Bank of New York Mellon, Merrill Lynch and Danske Bank. S&P slashed their credit rating. The SIV went into receivership in September. A subsequent rescue deal with the Royal Bank of Scotland reportedly fell apart but an insolvency ruling held off a firesale of the assets, much to the relief of every other financial institution that is still playing the SIV standoff game of trying to avoid creating a glut in mortgage based assets.
We’re sure that Cheyne is relieved that the SIV they founded in 2005 no longer bears their name. Hopefully, however, memories have not become so attenuated as to forget who it was who started and managed the company now called SIV Portfolio. It is hard not to wonder, however, if the name change might complicate negotiations for a refinancing of the SIV. Would you want to go before your credit committee pitching a loan deal for SIV Portfolio?


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