Who Might Follow Warren's Lead? Anybody?
December 10, 2007
News that legendary investor Warren Buffett bought up $2.1 billion of the $3.75 billion in high yield bonds priced for Energy Future Holdings Nov. 29 got me to thinking. Even though Warren’s move in this instance certainly wasn’t philanthropic, he does have a tendency toward giving. And seeing as the holiday season has arrived, and some $200 billion in debt remains in the pipeline and the economy is teetering on the edge of a recession, maybe the high yield loan and bond markets could use a few more helping hands.
But who? Which famous billionaires could be called upon by investment banks to dip into their bounteous moneybags and show the market a little love?
Let’s start with an easy one: Warren’s pal Bill Gates, who, with $59 billion of net worth, could scoop up a number of deals in their entirety without so much as a flinch. But what would Bill buy? It seems too obvious to point to a tech company, but maybe one of the credit markets’ needy sponsors could appeal to Bill’s own philanthropic side. The United Rentals (URI) buyout, for example, may be off the table for now, but if the company and its shareholders have their way, we will eventually see URI debt back in the pipeline. And since the company recently donated equipment to help “Extreme Makeover: Home Edition” build a house for a family in Louisville, Ky., it seems a good fit for Bill. Seriously, Bill, how could your heartstrings remain unstrummed by “Extreme Makeover, Home Edition”?
And what about Sergey Brin and Larry Page, the Google guys, who together are worth $37 billion? They famously dropped out of Stanford University to start their amazingly successful company from a friend’s garage. Don’t they owe something to the auto industry? Would it kill them to kick in a few billion on the Chrysler deal?
And doesn’t the Walton family, with a combined net Wal-Mart worth of $65 billion, owe just a little something to containers? Plastics manufacturers Intertape Polymer and Myers Industries together have nearly $1 billion in loans that have been packed away since the summer. How about a helping hand, Waltons?
Then we have Martha Stewart, who made Forbes magazine’s billionaire list for the first time in 2005, after the value of Martha Stewart Living Omnimedia stock actually more than doubled while she was in jail on insider trading charges. Couldn’t she, being the gambling woman she is, toss a $100 million or so on the table for the Silverton Casino bond deal? The company’s $215 million in second-mortgage notes are still expected to price at some point. Surely Martha could see fit to take a few of those off their hands. What do you say, Martha? Martha?
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