US giants snap up NTL bonds

FOUR US investment giants have emerged as owners of a quarter of the bonds in debt-laden cable company NTL. Their combined stake is worth almost $3bn (£2.1bn) and they are thought to have bought their bonds in the past six weeks.

Franklin Templeton, one of the biggest funds in America, is understood to have acquired between $500m and $750m of the bonds. Similar amounts have been amassed by Citigroup subsidiary Salomon Asset Management and vulture funds Angelo, Gordon and Appaloosa.

The four bought their bonds at about 33% of face value and are clubbing together for greater influence as NTL embarks on a restructuring of its $18bn debt mountain. The debt comprises $6bn of bank loans and $12bn of bonds.

Bondholders will be asked to switch most of their bonds into shares and the Franklin quartet is expected to demand that bond investors are given the majority of the equity and control of the board. The fact that four powerful US institutions own such a large percentage of the bonds greatly increases their power in the forthcoming discussions. NTL will confirm this week that it has appointed CSFB as principal adviser on the restructuring.