Hedge Fund Davidson Kempner Said to Buy Bad Debt from #UAE Bank - Bloomberg

Hedge Fund Davidson Kempner Said to Buy Bad Debt from UAE Bank - Bloomberg

Davidson Kempner Capital Management LP has acquired about $1.4 billion in bad debt from Abu Dhabi Commercial Bank PJSC, people familiar with the matter said, the second such transaction between the US hedge fund and one of the emirate’s largest lenders.

The loan book included a mix of secured and unsecured assets, the people said, declining to be identified as the information is confidential. Bloomberg News had first reported the Abu Dhabi-based bank’s plans to offload the debt in March.

Representatives for ADCB and Davidson Kempner declined to comment.

The transaction will allow Abu Dhabi’s second-largest lender to further clean up a balance sheet hurt by several large corporate defaults in recent years, including NMC Health Plc. The deal comes two years after ADCB sold a $1.1 billion non-performing loan portfolio to Davidson Kempner in a landmark transaction for the region.

Such deals have since gained prominence in the Middle East. Deutsche Bank AG acquired a portfolio of soured loans worth around $800 million from First Abu Dhabi Bank PJSC, the United Arab Emirates’ largest lender, at the start of the year.

Further afield, several lenders in Saudi Arabia have also been considering similar deals. Saudi National Bank is expected to complete a transaction by the end of the year, Bloomberg News has reported.