Instead of waiting decades for his Nike checks to roll in, LeBron did something in 2018 called securitization. His LLC packaged his future non-NBA earnings into bonds and sold them to life insurance companies advised by Guggenheim Partners for ~$300 million in cash upfront. These bonds may sound unusual — but the underlying strategy of using debt to unlock liquidity is not. The rich rarely sell their assets (which triggers massive taxes). Instead, they prefer to borrow against them. By locking in a fixed 4.8% interest rate on this debt, LeBron can invest the proceeds into businesses, real estate, and sports teams that compound at much higher rates, pocketing the spread. 📈 But… why life insurance companies? 🤔 Insurance companies sit on giant pools of capital called “float” made up of the premiums people pay them. Over the last 15 years, these insurers have been diversifying away from traditional low-yield government bonds to hunt for higher returns in private credit, making them the perfect buyer for securities like LeBron’s debt. Plus, life insurance companies need long-term assets to pay out policies decades in the future — making them a great match as holders of King James bonds which don't mature until 2049. This deal is all the more interesting because Mark Walter, CEO of Guggenheim, went on to buy the Lakers and recently sold his stake to Josh Kushner and Bob Iger for a record $12.5B amid an investigation by the SEC and Justice Department. Follow for more breakdowns of business & money. 🧠
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