David Tepper Buys MF Global Credit, IRE Subs and More

David Tepper, CEO of  Appaloosa Management, is getting cautious about equities, but is finding value in other asset classes.

Appalossa Management was founded  in 1993 as a distressed fund. Tepper became a celebrity in 2009, when the fund’s bets on financial stocks took off, earning the fund $7billion.

According to the latest 13-F filling from Appaloosa Management, filled yesterday with the SEC; Tepper completely sold out of Pfizer, Bank of America, Wells Fargo, Merck, United Health and several other companies.

Tepper seems concerned about financials, which are more volatile and sensitive to breaking news. Tepper sold some health-care stocks possibly because of major changes to the health care industry as a result of Patient Protection and Affordable Care Act.

However Tepper did buy a 8.64 percent of MF Global Holdings Ltd., two days after the firm filed for Bankruptcy protection.

A source in Europe who spoke to people at  Appaloosa Management, David Tepper is very concerned about the current situation and is cutting back on risk.  The source told me that Tepper also bought MF Global credit.

Tepper prefers credit over equity.  What the 13-F did not disclose  was Tepper’s large purchase ( the source guessed that it was $20-$70million) of MF Global Bonds at 35 cents on the dollar.

Additionally, David Tepper  bought  Portugal Telecom  bonds yielding 4.5% at $0.25 on the dollar.

Tepper also bought some Energias de Portugal bonds, although the price and yield are unknown.
Tepper bought Bank of Ireland Subordinated debt. The subordinated debt is junior to other types of debt if a firm declares bankruptcy. The bank is now under a lot of financial stress, and Tepper has sued the bank, although it is unclear what the lawsuit is claiming.

As reported last week, David Tepper bought some Commercial mortgage-backed securities (CMBS):

Below are the exact issues.

MSC 07-IQ14 AM 1000/
MSC 07-HQ12 AM 1100/
WBCMT 2007-C30 AM 1025/
WBCMT 2007-C31 AM 1025/
WBCMT 2007-C32 AMFX 1000/
WBCMT 2007-C33 AM 1000/BACM 06-2 AJ 70/
BSCMS 07-PW16 AJ 58/
BSCMS 07-T26 AJ 67/
CSMC 06-C3 AJ 65/
CGCMT 07-C6 AJ 58/
JPMCC 07-CB20 AJ 60/
LBUBS 06-C6 AJ 73/
LBUBS 07-C1 AJ 62/65 1.8MM OFFER
MLCFC 06-1 AJ 72/
MSC 07-T27 AJ 67/

BIDS ARE GOOD FOR 5-10MM
BSCMS 2007-T28 AJ 073945AH0 5x 65/
CD 2007-CD5 AJ 12514AAJ0 5x 67/
CGCMT 2006-C5 AJ 17310MAH3 5x 64/
COMM 2007-C9 AJ 20047RAH6 5×5 76.5/79.5
GSMS 2006-GG8 AJ 362332AH1 5×5 63/66
JPMCC 2007-CB20 AJ 46631QAJ1 TRADED
JPMCC 2007-LD12 AJ 46632HAL5 5×5.588 56/59

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