CHRONOLOGY-The credit crunch of 2007
LONDON, Nov 16 (Reuters) - The credit market turmoil of 2007 has seen banks register writedowns and losses totalling more than $50 billion and experts see no sign of let up this year.
Following is a timeline of events:
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* Q4, 2006 - U.S. housing market slows after 2 years of increases in official interest rates. Delinquency rates on subprime loans rise, leading to a wave of bankruptcies at subprime lenders. Interest rate spreads on Collateralised Debt Obligations, repackaged bonds and loans which included subprime mortgage debt, widen sharply in December, 2006 and January, 2007.
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* Feb 8, 2007 - HSBC says more funds will have to be set aside to cover bad debts in U.S. subprime lending portfolios. California's New Century Financial Corp -- the third largest U.S. subprime lender -- said it expected Q4 2006 loss. Spreads on non-investment tranches of home equity CDOs widen more than 200 basis points in the two days that follow.
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* Feb 27 - Global equities plunge as jitters about U.S. housing combine with 10 percent drop in China's main stock index.
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* June 20 - Two Bear Stearns-managed hedge funds BSC.N announce losses after making bad bets on securities backed by subprime loans. They sell $4 billion of assets to cover investor redemptions and expected margin calls. Merrill Lynch sells off assets seized from the funds.
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* July 10 - Credit ratings firm Standard & Poor's said it may cut ratings on some $12 billion of subprime debt. U.S. firms Home Depot Inc (HD.N) and D.R. Horton Inc (DHI.N) issue warnings about the housing market. Credit spreads measured by the iTraxx Crossover index, a widely-watched barometer of credit sentiment, jump 20 basis points to 270 -- up almost a percentage point from record lows under 188 basis points on June 1.
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* July 17 - Bear Stearns says two hedge funds with subprime exposure have very little value; credit spreads soar.
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* July 19 - S&P slashes ratings on some top-rated mortgage bonds by eight notches. Continued...
