The largest default event to hit money market mutual funds during the Great Liquidity Panic of 2007 is coming to a close, as receivers have agreed to a restructuring plan for Cheyne Finance, now SIV Portfolio Plc. Cheyne was responsible for the most bailout and support actions disclosed by money funds to date, so its pending resolution is a welcome development to fund advisors who are holding the senior debt and to any unrated funds bold enough to hold the unprotected paper. The at least half a dozen advisors impacted will soon be able to cash out, likely with losses, or roll the debt into a new higher quality debt vehicle.

Bloomberg writes "Goldman Agrees on $7 Billion Cheyne SIV Restructuring", saying, "Goldman Sachs Group Inc. and Deloitte & Touche LLP will sell some assets of a $7 billion structured investment vehicle set up by hedge fund Cheyne Capital Management (UK) LLP, in a model that may be used to wind down similar credit funds. The auction will determine the price at which the remaining assets held by SIV Portfolio Plc, previously known as Cheyne Finance Plc, will be transferred to a company set up by Goldman, said Neville Kahn, a partner at Deloitte in London. The auction will take place during the first three weeks of July, according to Kahn, whose firm is acting as the receiver for the SIV.

Reuters says in its article, "Goldman completes $7 billion SIV restructure," "Other SIVs, including Golden Key, Whistlejacket and Rhinebridge, are expected to follow Cheyne's model, being restructured by Goldman, said Stephen Peppiatt, at Bingham McCutchen, a legal advisor to a Cheyne senior creditor."

Finally, WSJ's "SIV's rescue may aid Goldman, but junior holders may get hurt", says, "For Goldman, it's a real coup. The bank gets the kudos for cutting the SIV knot, and probably a front-row seat on any further restructuring. And for one day, while the switchover takes place, Goldman will effectively be renting out its balance sheet -- undoubtedly for a tidy fee. So when the SIV saga really is history, not everyone will be remembered as a loser."

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