Bear still hoping to restructure funds: source

NEW YORK (Reuters) - Bear Stearns Cos. Inc. BSC.N and its adviser Blackstone Group are still hoping to restructure two troubled hedge funds managed by Bear, a source familiar with the situation said on Thursday.

The two hedge funds made bad bets on securities linked to subprime mortgages and turned in significant losses through April. Merrill Lynch & Co. Inc. MER.N seized some $850 million of collateral from the funds late last week and sold off some of the assets on Wednesday.

Blackstone declined to comment. Bear Stearns was not immediately available for comment.