Nuveen to Refinance $2.6 Billion in Debt—The Firm’s Third Billion-Dollar-Refi in Three Years
(WASHINGTON, DC) – Following on the heels of major capital withdrawals at a key subsidiary, Nuveen Investments is asking to refinance nearly $2.6 billion of its massive debt with bond investors, marking the third time in just over three years that the firm seeks relief from the repercussions of its leveraged buyout by private equity owner Madison Dearborn.
“We remain concerned that Nuveen is trapped in a debt service cycle that the company cannot escape,” said Ken Hall, General Secretary Treasurer of the Teamsters Union whose affiliated pension and benefit funds have more than $100 billion in assets.
As part of the leveraged buyout led by Madison Dearborn Partners in 2007, Nuveen borrowed more than $3.1 billion at high interest rates.
“We are concerned that Nuveen’s strategy to annually ask lenders for relief on massive loans may signal potential for trouble ahead,” Hall added. “Nuveen’s debt burden could ultimately result in higher fees for clients, a sale of assets or possibly liquidation.”
Nuveen’s poor credit status is well known within the financial community. Both Standard & Poor’s and Moody’s Investment Service rate Nuveen Investments’ various bank and corporate debt at or just one level above “junk” status on their respective ratings scales.
“Nuveen has reported losses nearly every quarter for the last four years,” said Rome Aloise, International Vice President of the Teamsters Union and Co-Chair of the Union’s Benefits Committee.
“One of Nuveen’s crown jewels, Tradewinds Global Investors, had combined losses and client withdrawals of nearly $28 billion of the firm’s $38 billion under management over the course of just one year. This might be standard operating procedure for firms owned by Madison Dearborn, but investing with asset managers that can’t seem to manage their own finances is a risk our funds can’t afford to take.”
Nuveen’s subsidiaries include: Nuveen Asset Management; Nuveen Hyde Park; NWQ Investment Management; Santa Barbara Asset Management; Symphony Asset Management; Tradewinds Global Investors; Winslow Capital Management, FAF Advisors, and Gresham Investment Management, LLC.