In late October, Bloomberg News reported on a puzzling deal
made by GSO Capital Partners LP, a unit of the private-equity firm Blackstone
In June, GSO bought credit-default swaps backed by debt belonging to Codere
(MCE:CDR), a struggling, Spanish betting-parlor operator.
GSO structured the deal so that it would receive a payout if Codere were late with its payment to a third party. Essentially, if Codere were to be late, GSO and Blackstone would make money.
Then, GSO reportedly offered Codere a loan for $100 million on the condition that Codere would be late
with its debt payment to that third-party company. Codere agreed. When Codere delayed an interest payment on its debt in September, it triggered a payout to GSO and Blackstone. The private-equity firm collected an estimated $15.6 million in insurance money.
And yet the story was not widely covered by the financial press, which got the The Daily Show
's Senior Financial Correspondent Samantha Bee thinking about how the media reports on Wall Street.
In a special report, Bee goes to several news sources, including the New York Times
and Buzzfeed, to ask why the story was ignored. Watch that segment from The Daily Show
Blackstone has questioned Bloomberg's account of the deal. In response to the The Daily Show
segment, Blackstone today released a statement:
“We love Jon Stewart and he continues to be one of the funniest people on TV. But the somewhat boring truth is that we cooperated with Codere and its advisors to save it from bankruptcy or liquidation. We provided capital when no one else would, which allowed the Company to live and fight another day.”
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No positions in stocks mentioned.