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American Capital, Ltd (ACAS): Elliott Associates Reports Derivative Agreements

Published on March 14, 2016 at 12:25 pm by Meena Krishnamsetty in Hedge Funds, News

Paul Singer‘s Elliott Associates has filed a Form 13D on American Capital Ltd. (NASDAQ:ACAS). The filing shows that Mr. Singer’s firm still owns 6.46 million shares of the company, as we reported in January. The filing does however provide an update in relation to some cash settled swaps with respect to over 19 million of the company’s shares that Elliott Associates has entered into an agreement regarding.

Item 6 of the filing was updated to add the following information:

Elliott, itself and through The Liverpool Limited Partnership, a Bermuda limited partnership and a wholly-owned subsidiary of Elliott (“Liverpool”), and Elliott International have entered into notional principal amount derivative agreements (the “Derivative Agreements”) in the form of cash settled swaps with respect to 4,707,354 and 14,340,745 shares of Common Stock of the Issuer, respectively (representing economic exposure comparable to approximately 2.0% and 6.0% of the shares of Common Stock of the Issuer, respectively). Collectively, the Derivative Agreements held by the Reporting Persons represent economic exposure comparable to an interest in approximately 8.0% of the shares of Common Stock. The Derivative Agreements provide Elliott and Elliott International with economic results that are comparable to the economic results of ownership but do not provide them with the power to vote or direct the voting or dispose of or direct the disposition of the shares that are referenced in the Derivative Agreements (such shares, the “Subject Shares”). The Reporting Persons disclaim beneficial ownership in the Subject Shares. The counterparties to the Derivative Agreements are unaffiliated third party financial institutions.

Hedge fund activity in American Capital Ltd. (NASDAQ:ACAS)

At Q4’s end, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 8% decline from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly (or had already accumulated large positions).

Of the funds tracked by Insider Monkey, Brian Taylor’s Pine River Capital Management has the largest position in American Capital Ltd. (NASDAQ:ACAS), worth close to $184.9 million, comprising 2.7% of its total 13F portfolio. The second most bullish fund manager is Elliott Management, with a $168.6 million position; the fund has 2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions consist of Anthony Bozza’s Lakewood Capital Management, Andy Redleaf’s Whitebox Advisors, and Fir Tree, founded by Jeffrey Tannenbaum.

Since American Capital Ltd. (NASDAQ:ACAS) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there were a few money managers that decided to sell off their positions entirely in the third quarter. It’s worth mentioning that Emanuel J. Friedman’s EJF Capital dumped the biggest stake of all the hedgies followed by Insider Monkey, totaling about $103.8 million in stock, while Christian Leone’s Luxor Capital Group was right behind this move, as the fund sold off about $56.7 million worth of shares. These bearish behaviors are important to note, as total hedge fund interest was cut by 3 funds in the third quarter.

You can access the original SEC filing by clicking here.

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
Elliott Associates 6,010,500 0 6,010,500 0 6,010,500 2.5%
Elliott International 0 6,464,500 0 6,464,500 6,464,500 2.7%
Elliott International Capital Advisors Inc 0 6,464,500 0 6,464,500 6,464,500 2.7%

Page 1 of 6 SEC Filing

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
SCHEDULE 13D
(RULE 13D – 101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
(Amendment No. 4)*
American Capital, Ltd.
(Name of Issuer)
Common Stock, $0.01 par value
(Title of Class of Securities)
02503Y 10 3
(CUSIP Number)
Christopher P. Davis, Esq.
Kleinberg, Kaplan, Wolff & Cohen, P.C.
551 Fifth Avenue, New York, New York 10176
(212) 986-6000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
February 16, 2016
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ].
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits.  See Rule 13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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Page 2 of 6 SEC Filing

1.
NAMES OF REPORTING PERSONS
 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Elliott Associates, L.P.
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)    [x]
(b)    [ ]
3.
SEC USE ONLY
4.
SOURCE OF FUNDS
WC
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)      [ ]
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7.
SOLE VOTING POWER
6,010,500
8.
SHARED VOTING POWER
0
9.
SOLE DISPOSITIVE POWER
6,010,500
10.
SHARED DISPOSITIVE POWER
0
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,010,500
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
 EXCLUDES CERTAIN SHARES    [ ]
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.5%
14.
TYPE OF REPORTING PERSON
PN

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Page 3 of 6 SEC Filing

1.
NAMES OF REPORTING PERSONS
 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Elliott International, L.P.
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)    [x]
(b)    [ ]
3.
SEC USE ONLY
4.
SOURCE OF FUNDS
WC
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)      [ ]
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands, British West Indies
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7.
SOLE VOTING POWER
0
8.
SHARED VOTING POWER
6,464,500
9.
SOLE DISPOSITIVE POWER
0
10.
SHARED DISPOSITIVE POWER
6,464,500
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,464,500
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
 EXCLUDES CERTAIN SHARES    [ ]
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.7%
14.
TYPE OF REPORTING PERSON
PN

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Page 4 of 6 SEC Filing

1.
NAMES OF REPORTING PERSONS
 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Elliott International Capital Advisors Inc.
2.
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)    [x]
(b)    [ ]
3.
SEC USE ONLY
4.
SOURCE OF FUNDS
OO
5.
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)      [ ]
6.
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7.
SOLE VOTING POWER
0
8.
SHARED VOTING POWER
6,464,500
9.
SOLE DISPOSITIVE POWER
0
10.
SHARED DISPOSITIVE POWER
6,464,500
11.
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,464,500
12.
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
 EXCLUDES CERTAIN SHARES    [ ]
13.
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.7%
14.
TYPE OF REPORTING PERSON
CO

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Page 5 of 6 SEC Filing

The following constitutes Amendment No. 4 to the Schedule 13D filed by the undersigned (“Amendment No. 4”).  This Amendment No. 4 is being filed to disclose an increase in the Reporting Persons’ combined economic exposure in the Issuer due to a decrease in the Issuer’s shares of Common Stock outstanding.  This Amendment No. 4 amends the Schedule 13D as specifically set forth herein.
Item 5. Interest in Securities of the Issuer.
Item 5(a) is hereby amended and restated to read as follows:
(a)            As of the close of business on the date hereof, Elliott, Elliott International and EICA collectively have combined economic exposure in the Issuer of approximately 13.2% of the shares of Common Stock outstanding.
The aggregate percentage of Common Stock reported owned by each person named herein is based upon 239,350,681 shares of Common Stock outstanding as of February 1, 2016, which is the total number of shares of Common Stock outstanding as reported in the Issuer’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 16, 2016.
As of the close of business on the date hereof, Elliott beneficially owned 6,010,500 shares of Common Stock, constituting approximately 2.5% of the shares of Common Stock outstanding.
As of the close of business on the date hereof, Elliott International beneficially owned 6,464,500 shares of Common Stock, constituting approximately 2.7% of the shares of Common Stock outstanding. EICA, as the investment manager of Elliott International may be deemed to beneficially own the 6,464,500 shares of Common Stock beneficially owned by Elliott International, constituting approximately 2.7% of the shares of Common Stock outstanding.
Collectively, Elliott, Elliott International and EICA beneficially own 12,475,000 shares of Common Stock, constituting approximately 5.2% of the shares of Common Stock outstanding.
Collectively, Elliott, Elliott International and EICA have economic exposure comparable to approximately 8.0% of the shares of Common Stock outstanding pursuant to Derivative Agreements, as disclosed in Item 6.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
The first paragraph of Item 6 is hereby amended and restated to read as follows:
Elliott, itself and through The Liverpool Limited Partnership, a Bermuda limited partnership and a wholly-owned subsidiary of Elliott (“Liverpool”), and Elliott International have entered into notional principal amount derivative agreements (the “Derivative Agreements”) in the form of cash settled swaps with respect to 4,707,354 and 14,340,745 shares of Common Stock of the Issuer, respectively (representing economic exposure comparable to approximately 2.0% and 6.0% of the shares of Common Stock of the Issuer, respectively). Collectively, the Derivative Agreements held by the Reporting Persons represent economic exposure comparable to an interest in approximately 8.0% of the shares of Common Stock. The Derivative Agreements provide Elliott and Elliott International with economic results that are comparable to the economic results of ownership but do not provide them with the power to vote or direct the voting or dispose of or direct the disposition of the shares that are referenced in the Derivative Agreements (such shares, the “Subject Shares”). The Reporting Persons disclaim beneficial ownership in the Subject Shares. The counterparties to the Derivative Agreements are unaffiliated third party financial institutions.

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Page 6 of 6 SEC Filing

SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information with respect to it set forth in this statement is true, complete, and correct.
Dated: March 11, 2016
ELLIOTT ASSOCIATES, L.P.
By: Elliott Capital Advisors, L.P., as General Partner
By: Braxton Associates, Inc., as General Partner
By:
/s/ Elliot Greenberg
Elliot Greenberg,
Vice President
ELLIOTT INTERNATIONAL, L.P.
By: Elliott International Capital Advisors Inc.,
as Attorney-in-Fact
By:
/s/ Elliot Greenberg
Elliot Greenberg,
Vice President
ELLIOTT INTERNATIONAL CAPITAL ADVISORS INC.
By:
/s/ Elliot Greenberg
Elliot Greenberg,
Vice President

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