According to the Zohar III documents, equity accounts for only 4.7% of capital committed.
Will the troubled Zohar CLOs continue to make interest payments and pay off at maturity?
Billions in bondholder money is at stake in her three most recent CLOs Zohar I, II, III.
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Yet, as we kicked off the festival with the funky sounds of Zohar, it became apparent that all was not lost.
Zohar I, issued in 2003, is the most troubled portfolio of all.
Considering the tens of millions in fees Tilton gets each year from CLOs like Zohar, her potential equity losses are more than covered.
Moody's says 43% of the assets in Zohar I are either unrated, have no "credit estimate" or have had a stale credit estimate for 12 months.
Tilton explains that she holds the equity in all of her Zohar CLOs and is at risk of losing capital if her bonds sustain large losses.
Tilton's companies will need to generate enough to meet Zohar liabilities or she will need to sell her companies and loans for enough to pay back the Zohar notes.
According to Zohar Hod of SuperDerivatives, a derivatives-pricing firm, there has already been movement away from LIBOR towards using overnight index swaps to discount cash flows on certain instruments.
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Specifically, Zohar III's reinvestment period ends in March 2012.
Given that Tilton still has her 2007 Zohar III funds available to her through March 2012, is she lending money to her troubled Zohar I, II and III portfolio companies to help keep them current on interest payments?
Given that Tilton still has her 2007 Zohar III funds available to her through its March 2012 reinvestment period, is she lending money to her troubled Zohar I, II and III portfolio companies to help keep them current on interest payments?
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