Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Tepper Goes Long MF Global Bonds and Stock

On Tuesday hedge-fund manager David Tepper’s Appaloosa Management revealed it had purchased an 8.64 percent stake in MF Global Holdings Ltd. stock just days after the securities firm declared bankruptcy, according to a filing with SEC.

That’s well known thanks to the regulatory filing. Less well known is that Tepper has also gone long MF Global bonds.

From Jacob Wolinksy at Valuewalk:

A source in Europe who spoke to people at Appaloosa Management [said] David Tepper is very concerned about the current situation and is cutting back on risk. The source told me that Tepper also bought MF Global credit.

Tepper prefers credit over equity. What the 13-F did not disclose was Tepper’s large purchase (the source guessed that it was $20-$70 million) of MF Global Bonds at 35 cents on the dollar.

CNBC has confirmed this with Wolinksy’s source. Wolinsky also reports that Appaloosa bought Portugal Telecom bonds yielding 4.5 percent at 25 cents on the dollar, Energias de Portugal bonds, and the subordinated debt of the Bank of Ireland .

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