Thursday, July 31, 2008

Merrill Lynch - Management of Sub Prime Fallout

July 2008

Merrill agreed to sell $30.66 billion of collateralized debt obligations for $6.7 billion. The buyer is an affiliate of Lone Star Funds, a Dallas based investment manager.

Merrill will provide financing for about 75% of the purchase price. The financing is secured only by the assets being sold, meaning Merrill would absorb any losses over the CDOs beyond $1.68 billion.

This article will be developed gradually.

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