Credit markets across the world were braced for trouble last night after Merrill Lynch abandoned efforts to save two Bear Stearns hedge funds, forcing the sale of $850m (£426m) of sub-prime mortgage bonds and other assets for debt repayment.
JP Morgan and other key creditors have yet to decide whether to enforce margin calls as a panic sell-off in the market for 2006-vintage mortgage securities pushes the two asset management funds towards the brink.
Sources close to the deal said Bear Stearns was trying to organise "an orderly unwind", conceding that the funds could not be saved.
The mushrooming crisis is the worst hedge fund upset since last year's collapse of Amaranth Advisers, which lost $6.7bn betting on gas futures. This time, the ramifications may be broader as the worsening property slump engulfs a large chunk of America's $2,000bn sub-prime sector.
more ...
------------------------
Check out the rest of this blog here.
Thursday 21 June 2007
blog comments powered by Disqus
Subscribe to:
Post Comments (Atom)
