Subprime Hits Basis Capital

HenryTo · Posted: Thu Jul 19, 2007 8:27 am Post subject: Subprime Hits Basis Capital

Subprime crisis spreads to Australia. Note that these two funds will be forced to liquidate their assets by their lenders:

http://abc.net.au/news/stories/2007/07/19/1982732.htm?section=justin

HenryTo · Posted: Wed Aug 29, 2007 8:22 am Post subject:

Basis Yield Alpha Fund files for bankruptcy:
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NEW YORK, Aug 29 (Reuters) - Basis Yield Alpha Fund, a hedge fund specializing in corporate and structured credit, on Wednesday filed for bankruptcy protection in the United States amid mounting losses from U.S. subprime mortgage assets, court papers show.

The Cayman Islands-registered fund, run by the Australian firm Basis Capital, listed more than $100 million of assets and more than $100 million of liabilities in its filing with the U.S. bankruptcy court in Manhattan.

In court papers, Basis Yield said that it had in June begun to suffer a "significant devaluation" in its asset portfolio, following market volatility related to U.S. subprime lending defaults.

It said the devaluation led to margin calls, which it was unable to meet, and the issuance of several default notices by counterparties seeking to close out trades or seize assets. Basis Yield said it has disputed many of these notices. (Reporting by Jonathan Stempel)