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Bear Stearns may assume hedge fund loans: report
NEW YORK |
NEW YORK (Reuters) - Bear Stearns Cos. BSC.N, trying to prevent the collapse of two of its hedge funds, may take over about $3.2 billion of the funds' loans to prevent creditors from seizing more assets, Bloomberg reported on its Web site on Friday.
Bear Stearns offered to assume the loans, made by banks and securities firms, after Merrill Lynch & Co. MER.N took assets that backed $850 million in credit lines, according to the report, which cited people with knowledge of the plan.
An agreement with creditors may avert a fire sale of assets, the report added.
Bear Stearns was not immediately available for comment.
The company's High Grade Structured Credit Strategies Enhanced Leverage Fund made bad bets on collateralized debt obligations linked to the $583 billion subprime mortgage bond market.
Assets once topped $20 billion at that fund and a sister fund, the High Grade Structured Credit Strategies Fund, but the funds have lost billions of dollars.
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