Friday, Aug 10, 2007
Strewth, ya mean our investment is worth less than we thought?
CreditFlux: Australian councils caught up in subprime CDOs reports Australian Financial Review
Australia’s Financial Review has repeated claims that 35 local councils have severe mark-to-market losses on a CDO backed by US subprime mortgages that they purchased as part of their investment portfolios. Australian local authorities invest under “prudent person” guidelines and generally purchase highly rated securities and bank debt or managed funds.
The article focuses on what it calls ‘hard sales’ tactics by the deal arranger Grange Securities, which was bought by Lehman Brothers earlier this year. The article concludes by suggesting that two Australian states are looking to change investment guidelines for councils.
Posted by lvmreader @ 05:19 PM (152 views) Add Comment
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