Thursday, June 21, 2007

Bear Stearns Hedge Fund Collapse, Auction Send Shudder Through CDO Market

(Bloomberg) -- Merrill Lynch & Co.'s threat to sell
$800 million of mortgage securities seized from Bear Stearns Cos.
hedge funds is sending shudders across Wall Street.

A sale would give banks, brokerages and investors the one
thing they want to avoid: a real price on the bonds in the fund
that could serve as a benchmark. The securities are known as
collateralized debt obligations, which exceed $1 trillion and
comprise the fastest-growing part of the bond market.


Read more at Bloomberg Bonds News

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