SAO PAULO Aug 5 A Brazilian-based investment fund managed by Bank of New York Mellon Corp had to write down more than half of the value of its assets due to losses in investments linked to Argentine government debt, according to a securities filing.
The bank's Brazilian fund manager BNY Mellon DTVM said in a filing on Monday that the Brasil Sovereign II Fundo de Investimento de Divida Externa (FIDEX) had invested in credit-linked notes under previous management in 2011.
"We inform that due to the suspension of payments on foreign debt notes issued by Argentina that backed those notes and the need to change the evaluation methodology for some private debt notes in FIDEX's portfolio, provisions for losses have been made on Aug. 1," the filing said.
According to Brazil's Securities and Exchange Commission CVM website, the fund's assets fell to 180.5 million reais ($79 million) reais on Aug. 1 from 378.4 million reais the previous day, a 52 percent drop.
Argentina defaulted on July 31 after losing a long legal battle with hedge funds that rejected the terms of a debt restructuring in 2005 and 2010. ($1 = 2.2805 reais) (Reporting by Anthony Boadle; Editing by Ken Wills)