Blackberry Patents may raise Fairfax debt - report

September 25
12:07 PM 2013

According to a Raymond James Financial Inc. report yesterday, the valuation of BlackBerry Ltd.'s debt-free patents, licenses and secure network could fetch USD2.8 billion. These assets were reportedly a factor for Fairfax Financial Holdings Ltd. in raising debt enough to cover its USD4.7 billion bid for the smartphone maker. Money manager Nicholas Leach at Canadian Imperial Bank of Commerce's CIBC Global Asset Management unit said that Fairfax would be seeking USD2 billion to be able to fund its buyout of Blackberry.

Debt-research firm CreditSights Inc. said BlackBerry's credit profile would look like a junk-rated company who has a grade of more than three levels below investment. 

Money manager Marc Gross at RS Investments in New York said that investors would purchase debt if it is backed with stable or profitable assets that cound withstand bankruptcy. "The banks would need to do a first-lien backed by the assets. If that's not enough, it has to come with a sweetener for the other portions, because the market is going to be very skeptical."

Blackberry spokesman Adam Emery declined to provide comment on the matter. In a statement made on September 23, Blackberry could look for better offers from other bidders by November 4. 

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