How to deal with the ‘what is it worth?’ problem

Discussion in 'Wall St. News' started by ASusilovic, Aug 15, 2007.


    The upheavals in debt markets because of the subprime-mortgage shakeout have left some investment funds wondering how to value their holdings, notes the Wall Street Journal’s Heard on the Street column. Last week, France’s BNP Paribas said it would stop the flow of money into and out of three of its investment funds because it couldn’t “fairly” value securities in the funds. That, the bank said, made it impossible to come up with a net asset value for the funds that would allow investors to get in or out, notes the column.

    When the bank, for example, recently tried to sell about $60m of bonds backed by US mortgages, it couldn’t find any buyers. Among the brokers it called, “some of them weren’t even answering the phone,” Alain Papiasse, head of BNP’s asset-management and services division, told the Journal.