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Sept 21 (Reuters) – Wall Street banks completed the sale of $8.55 billion in loans and bonds backing the leveraged buyout of business software company Citrix Systems Inc (CTXS.O) by accepting a $700 million loss, a person familiar with the matter said on Wednesday.
The process emerged as a key test of banks’ ability to offload junk-rated debt from their books, a process that is necessary for them to recycle capital and comply with regulations governing their financial health.
While the syndication was completed successfully, it was done at a steep discount to the levels that the banks underwrote the debt. It was also buoyed by one of Citrix’s acquirers, hedge fund Elliott Management, helping out by buying $1 billion in bonds, a second source said.