by Paula Schaap, Senior Reporter, November 19, 2010
As investors pulled money from one of Harbinger Capital’s funds, Phil Falcone raised $350 million by selling bonds through a holding company he owns.
Harbinger Group issued the five-year notes this week, according to a regulatory filing.
Harbinger Group is a holding company, rebranded from Zapata, a wildcat oil drilling company founded by the family of former U.S. President George H.W. Bush that Falcone’s hedge fund firm acquired last year.
Its advantage to Harbinger Capital is that it can raise money in the public markets in a way that hedge fund firms cannot.
The note sale took place as investors, reportedly upset by a $113 million loan Falcone took from a fund to pay his personal tax return, at a time when the fund was frozen, are asking for their money back.
Goldman Sachs was said to be redeeming $120 million from the Harbinger special situations fund, while New York State Common Retirement Fund took out its $41 million investment.
Although Falcone is swinging for the fences with his dream of establishing a next-generation wireless network by backing telecommunications company LightSquared, the $350 million note sale isn’t part of that deal.
The note sale deal calls for Harbinger’s hedge funds to pass majority ownership of consumer goods company Spectrum Brands Holding -- best known for its George Foreman products -- to Harbinger Group.
The Spectrum acquisition was necessary for Harbinger Group to keep its listing on the New York Stock Exchange. NYSE had notified the company in August that it did not meet its requirements for listing companies.
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Harbinger Group issued the five-year notes this week, according to a regulatory filing.
Harbinger Group is a holding company, rebranded from Zapata, a wildcat oil drilling company founded by the family of former U.S. President George H.W. Bush that Falcone’s hedge fund firm acquired last year.
Its advantage to Harbinger Capital is that it can raise money in the public markets in a way that hedge fund firms cannot.
The note sale took place as investors, reportedly upset by a $113 million loan Falcone took from a fund to pay his personal tax return, at a time when the fund was frozen, are asking for their money back.
Goldman Sachs was said to be redeeming $120 million from the Harbinger special situations fund, while New York State Common Retirement Fund took out its $41 million investment.
Although Falcone is swinging for the fences with his dream of establishing a next-generation wireless network by backing telecommunications company LightSquared, the $350 million note sale isn’t part of that deal.
The note sale deal calls for Harbinger’s hedge funds to pass majority ownership of consumer goods company Spectrum Brands Holding -- best known for its George Foreman products -- to Harbinger Group.
The Spectrum acquisition was necessary for Harbinger Group to keep its listing on the New York Stock Exchange. NYSE had notified the company in August that it did not meet its requirements for listing companies.
Related Stories
Phil Falcone Pledges Art For Loan
Harbinger Said to Be Under SEC, DOJ Scrutiny
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