A loan issued by the financing entity of Guggenheim Investments whipsawed on Wednesday after executives reiterated to lenders that earnings would likely improve in the third quarter while steering clear of details about the wide-ranging probe into Mark Walter’s business empire.
The $367 billion asset management arm of Walter’s Guggenheim Partners told investors that its second-quarter results, which showed a 77% drop in a measure of earnings, didn’t include advisory fee accrual at its Guggenheim Private Investments unit, according to people familiar with the matter. It plans to book that revenue in the third quarter, said the people, who asked not to be named because the call wasn’t public.
Executives including Dina DiLorenzo, president of Guggenheim Investments, largely avoided getting into details about the probe, other than to note that the asset manager isn’t under investigation as it relates to TWG Global, Walter’s holding company, the people said.
GIH Borrower LLC’s first-lien term loan, which had plunged to trade below 80 cents on the dollar Monday, was quoted during the call at around 90 cents, but then fell back toward the low-80s, according to broker runs seen by Bloomberg.
A Guggenheim representative declined to comment on the lender call.
Accounting at GPI was the focus of a whistleblower report early last year, Bloomberg previously reported. The report helped prompt a federal criminal investigation, which has now expanded to look at unrelated matters at Walter’s insurance companies.
TWG Global has been pushing to address regulators’ concerns around loans that weren’t properly labeled as affiliated. He has also sold his stake in the NBA’s Los Angeles Lakers and has explored offloading his ownership position in Chelsea FC to Clearlake Capital, the majority owner of the London-based football club.
Written by: Reshmi Basu — With assistance from Ava Benny-Morrison and Sridhar Natarajan @Bloomberg
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