Anatomy of a good deal

Lone Star Fund's John Grayken is no stranger to troubled assets, notes the New York Times. He made a fortune buying troubled mortgages from the Resolution Trust Corporation in the early 1990s. In many ways, he's the ultimate vulture. He's in the news again because he just bought Merrill Lynch's most toxic collateralized debt obligations for about 22 cents on the dollar (about $6.7 billion). Merrill Lynch of course is financing about 75 percent of the deal. The consensus seems to be that he got a good deal. Lone Star's Hudson Advisors affiliate, with 800 employees, works out individual loans and mortgages. Lone Star's investors have been very happy with Grayken over time, and the company just raised two more funds. The Times suggests that more banks will be seeking out Grayken to offload more CDOs. This could turn out very well for him.    

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