Tuesday, July 17, 2007

Worst than anticipated...

Bear Sterns making the news in the wrong way: both the highly leverage CDO funds were virtually wiped out. Not too many people anticipated this and it likely holds legal ramification for Bear as the funds must have been highly leveraged in the more "speculative" tranches that fell double-digits.

By Yalman Onaran
July 17 (Bloomberg) -- Bear Stearns Cos. told investors that
assets of two hedge funds that almost collapsed last month are
virtually worthless, the Wall Street Journal reported.
The assets of the High-Grade Structured Credit Strategies
Enhanced Leverage Fund are worth almost nothing, the Journal said
on its Web site, citing people familiar with the matter.
Assets in a second fund, the High-Grade Structured Credit
Strategies Fund, are worth about 9 percent of the value since the
end of April, the Journal said.
Bear Stearns was forced to provide $1.6 billion in emergency
financing to one of the funds last month after it made wrong-way
bets on collateralized debt obligations tied to subprime

No comments: