George Soros, Others Benefit on Ex-MF Global Debt

George Soros, or at least his family fund Soros Fund Management, is up more than $130 million after it “bought about $2 billion of European bonds formerly owned by MF Global Holdings Ltd.,” writes the Wall Street Journal. It is the very same “debt that helped force the securities firm to file for bankruptcy protection Oct. 31, according to people close to the matter.”

George Soros Scoops Up $2 Billion in Bonds

MF Global unloaded about $1.5 billion of that debt as it approached bankruptcy, leaving about $4.8 billion leftover. After its bankruptcy, the remaining bonds were turned over to KPMG, MF Global’s bankruptcy administrator in London. “These positions were offered to a number of big investors immediately after MF Global’s collapse, according to investors who had a chance to buy the bonds,” reports the Wall Street Journal. “Though a number of large investors passed on these bonds, Mr. Soros’s interest was piqued, according to people close to the matter.” Soros had transferred a “chunk of its holdings into safe, liquid investments” earlier this year, a move which gave him “the ability to write the approximately $2 billion check for MF Global’s bonds,” which were available below market price.

George Soros isn’t the Only One to Benefit

According to the Wall Street Journal, JP Morgan Chase (JPM) “and at least one large hedge fund bought Italian bonds that until recently were owned by MF Global Holdings Ltd., the bonds that played a key role in pushing the securities firm formerly run by Mr. Corzine into bankruptcy, according to people familiar with the matter.” It continues, “J.P Morgan and the hedge fund didn’t buy nearly as much as the $2 billion that Mr. Soros spent to buy these bonds. The securities were sold just after MF Global’s Oct. 31 bankruptcy filing under an administrator currently overseeing the firm, according to the people.” While the bonds may not be a sure thing, after all they don’t mature until December 2012 and anything can happen between now and then, “Buyers paid about 89 cents on the dollar for the Italian bonds, compared with a market price of about 94 cents at the time, according to the trader who bought them” – a good buy by any estimation.