CarVal remains in Lifemark loan talks

American hedge fund CarVal and Lifemark administrators say they remain in talks over a lifeline loan for the Luxemburg-based life settlements company.

CarVal and the Luxemburg arm of administrators KPMG say reports that the talks have broken down are “incorrect” and the £40m restructuring deal remains in the due diligence stage.

A statement says: “Lifemark and CarVal Investors confirm that a restructuring of Lifemark is still being considered.”

According to sources, Lifemark decided to repay a smaller, short-term loan of £3.5m to CarVal, which had been provided to prevent life settlement bonds from defaulting, while the restructuring talks progressed.

“Lifemark and CarVal Investors confirm that a restructuring of Lifemark is still being considered”

Lifemark was able to repay this bridging loan because some of its other life settlement bonds matured.

It opted to pay off CarVal with the proceeds because the costs associated with its short-term loan were high.

Around 23,000 Keydata clients have £349m invested in Lifemark which is currently in administration and has suspended payments to bondholders to preserve capital. (article continues below)

The Financial Services Compensation Scheme will announce in September whether they will accept claims from Lifemark investors regarding potential losses.

Last week, Money Marketing, Fund Strategy’s sister publication, revealed that another American institutional investor may step in to offer Lifemark the loan.