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Goldman, Jpmorgan Saddled With Debt They Can't Sell

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Goldman Sachs Group Inc., JPMorgan Chase & Co. and the rest of Wall Street are stuck with at least $11 billion of loans and bonds they can't readily sell.

The banks have had to dig into their own pockets to finance parts of at least five leveraged buyouts over the past month because of the worst bear market in high-yield debt in more than two years, data compiled by Bloomberg show.

seems like there more to come

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Banks face $200bn high-risk debts - Telegraph

Investment banks could soon be left holding $200bn in high-risk exposure on jumbo takeover deals agreed before the credit markets turned hostile a month ago.

A consortium of banks led by Deutsche Bank and Barclays Capital have yet to find buyers for £9bn in debt to cover KKR's takeover of Alliance Boots, Europe's biggest leveraged buyout and now a barometer of risk appetite for future deals.





Overall, spreads on high-yield corporate debt have jumped by 130 basis points since it first emerged that two Bear Stearns hedge funds had run into trouble on US sub-prime property debt.

In effect, the cost of credit for mid-tier companies has jumped from 6.9pc to 8.2pc in a month.

Oh dear, oh dear. Make sure you're not holding the junk bond when the music stops. Well I suppose the investment banks had retrieved their losses from the dot com crash. Just in time for the bond one. :lol:


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