RBS put a €620 million portfolio of loans up for sale at the beginning of the month (although this was later reduced to €440 million when some of the assets were revealed to be subject to a lock-up). The effect of such a bid list on a market still licking its wounds after the Icelandic bank collapse was inevitable – average bids hit new lows of early 60s.
“The Icelandic banks financed €2 billion through total return swaps [TRS] and the secondary market fell 20 points in a month after their collapse – €2 billion TRS positions were dropped on the market in a week,” grumbles a CLO manager.
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