George Soros’ family fund [Soros Fund Management LLC] bought about $2 billion worth of European bonds at a discount from now-bankrupt MF Global shortly after the brokerage firm collapsed. This was reported last week by the WSJ’s Gregory Zuckerman and Dana Cimilluca.
Zuckerman and Cimilluca are now reporting the discount Soros got on his bonds trade and the current size of his unrealized profits:[via WSJ] “[T]he purchases highlight the hefty profits that could come from these bonds. Mr. Soros’s family fund….currently is up more than $130 million based on the marked-down prices paid for the bonds, according to a trader who bought some of the same bonds, though it is hard to put an exact value on the complicated trade.”
The Journal notes the buyers paid about 89 cents on the dollar for the Italian bonds compared with a market price of about 94 cents at the time (Soros bought around $2 billion of the bonds issued by various European nations, mostly from Italy). Soros was able to buy the bonds at a discount to market from MF Global’s bankruptcy administrator KPMG.
JP Morgan (JPM) and at least one large hedge fund were said to have participated in the sales of the securities which took place just after MF Global’s October 31 bankruptcy filing.