A little better than the 100 cents on the dollar the taxpayers paid AIG?
Is that a less than 30% anticipated default rate?
yitbos
70 is better than i expected
Looks to me that $1.3 billion in assets were purchased for $64.2 million in cash and a small amount of funny money.
Need a lot more information than the article provides in order to run an analysis.
Personally, I'd much rather play in traffic than spec poisoned 'assets' such as these.
Back up a sec and look at who provided the leverage for the deal: We sucker taxpayers.
Starting from that point, now work your way through a “margin call” for these assets if the default rate goes to a point where all the money the “private investors” put into the deal is consumed by mark-to-reality accounting of dubious loans and irrecoverable debt.
When you do, what you see is this: the “private sector” gets a big piece of the upside, and we taxpayers are holding the bag on the downside, UNLESS the details of the agreement allow for what would effectively be a “margin call” demanding that the investors put up more cash to hold onto their position.
I seriously doubt that such a clause is going to be enforced on these investors...
If I could get a deal like this, heck, I’d buy some of this crap paper. But there’s no way the FDIC is going to offer a guy like me who asks protologically annoying questions about bank balance sheets and loan terms to play in their game.