Merrill sells Bear Stearns fund assets |
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Wed, 20 Jun 2007 22:17
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NEW YORK (AP) - Merrill Lynch & Co. on Wednesday launched an auction of assets from two troubled hedge funds controlled by Bear Stearns Cos., triggering a rarely seen confrontation between two major Wall Street players.Multiple people familiar with the auction, speaking on condition of anonymity because they were not authorized to discuss it publicly, confirmed that it took place despite last-minute speculation it might be canceled.Bear Stearns had hoped its rivals who invested in the funds -- including JPMorgan Chase & Co., Deutsche Bank, and Citigroup Inc. -- would allow it to put together a rescue plan. So far, only JPMorgan Chase seemed willing to negotiate after it canceled its own auction that was planned for Wednesday afternoon.Merrill Lynch is selling high-grade, collateral-backed debt obligations worth about $850 million. Other creditors could follow in the coming days.The Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Fund and the High Grade Structured Credit Strategies Fund have slumped this year because some of their assets were pegged to the mortgage market. Borrowers with weaker credit have been defaulting on subprime loans, and that has caused instability throughout the market.The funds, run by mortgage veteran Ralph Cioffi, sold roughly $4 billion of subprime mortgage-backed securities last week.Spokesmen from Merrill Lynch, JPMorgan and Bear Stearns would not comment on the asset sale.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Merrill delays Bear fund asset auction 