Hahaha... Doesn't turning the assets into an institutional loan basically the same as keeping those assets on balance sheet (proxy) ? And they still get to mark the sale at 90c even though they are insuring it another 20c deep? Wouldn't fair accounting need them to account for that as an actuarial liability requiring some sort of fair reserve? (ie this is like selling puts 3 years out on the S&P at 1300 strike (not 20% otm, but notice the likelyhood of a leveraged deal downgraded in a recession w/ limited cashflows is pretty high). Its a potential liability going forward. What a scheme... http://us1.institutionalriskanalytics.com/pub/IRAMain.asp Take an example that illustrates the difficulty of really achieving "fair value" from the FAS 157 rule in a market filled with illiquid derivative assets. We hear from the channel c/o Mike "Mish" Shedlock that the $12 billion sale of leverage loans announced by Citigroup (NYSE:C) last week at a price of 90 cents on the dollar includes terms whereby C indemnifies the buyer for the first 20 cents worth of losses, meaning that the true economic value is 70 cents, not 90 as advertised. More, apparently C is providing 80% financing for the deal.