Goldman Sachs rescues $7B Cheyne SIV

Last summer, the SIV — now known as SIV Portfolio PLC — faced massive losses as the commercial paper market failed.

The Goldman Sachs Group Inc. of New York has agreed to save a $7 billion structured investment vehicle, according to published reports.
The SIV, a fund that borrows money by issuing short-term securities that it then lends by purchasing long-term securities, was previously run by London-based hedge fund Cheyne Capital Management (UK) LLP.
Last summer, the Cheyne Finance SIV — now known as SIV Portfolio PLC — faced massive losses as the commercial paper market failed. As a result, it became unable to raise money, and the vehicle sold off its bank debt and asset-backed securities at a loss.
Goldman and receivers Deloitte & Touche LLP of New York will work together, auctioning some of Cheyne Finance’s assets in the coming weeks, Neville Kahn, a receiver at Deloitte, told Bloomberg.
News of Goldman’s bailout arrives just as the firm announced a fall in earnings during the second quarter: Earnings per share fell to $4.58 for the quarter ending May 30, down from $4.93 for the same period in 2007.
Net earnings also tumbled to $2.09 billion from $2.33 billion in the second quarter of 2007.