Hedge funds including Diameter Capital Partners, Canyon Partners and Farallon Capital Management scooped up an $874.5 million obligation FTX owed to BlockFi Inc., according to people familiar with the matter, marking the largest trade to-date in the surging market for debt tied to Sam Bankman-Fried’s fraud-tainted exchange.
The transaction is the latest sign that the surprising secondary market for creditor claims that’s emerged from FTX’s ashes will be a boon for debt investors. Obligations fetching about 10 cents on the dollar when FTX collapsed will be fully repaid with interest, a rare win benefiting customers and hedge funds that amassed large bets when prospects for repayment were dim.
