Sources Informed: Credit Investing Firms Are Buying Debt from FTX Clients at Cheap Prices

Credit investment firms are seeking to buy debt from clients of bankrupt cryptocurrency exchange FTX, The Block reported, citing people familiar with the matter. Apollo Global Management and Attestor are among the prominent investors who have held talks about buying debt. Niche investment firm 507 Capital has bought several claims from hedge funds looking to exit FTX quickly, selling them for less than what FTX clients received from bankruptcy proceedings. Thomas Brazilel, founder of 507 Capital, said some FTX clients said they wanted to close the debt sale by the end of the year so they could write off tax losses. Payments of 5 to 6 cents per dollar of claim face value have been paid for FTX claims with notional values of $2 million, $3 million and $8 million, Brazilel said. He is also in talks to claim about $100 million for a Singapore-based fund manager, and has spoken to a German fund that has $23 million frozen on FTX. Funds asking to sell typically ask for closer to 10 cents per dollar, he said.