Tuesday, February 9, 2010

Murphy, Bair: Protium deals

"...Bankers close to the Protium deal say Mr Obama’s mooted restrictions on large banks could create a big opportunity for people who specialise in extracting value from the illiquid, highly structured assets institutions remain saddled with. In the case of Protium, Barclays loaned the money to the new fund to buy the portfolio, replacing the volatility caused by owning risky assets with regular cash flows from interest payments.

Importantly, the assets will stay on Barclays’ balance sheet for regulatory purposes, meaning that the bank will be forced to make capital provisions against the $12bn loan extended. "

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