Wall Street Looks To Monetize California IOUs
California owes you? Don’t fret…Wall Street’s got a plan.
From the Financial Times: Wall Street gears up to trade California IOUs
By Nicole Bullock in New York
Published: July 5 2009 23:33
[...]
Wall Street, quick to spot an opportunity, is also gearing up to trade the payment promises.
“We have a whole team working on it,” said Barry Silbert, chief executive of SecondMarket, a company that trades illiquid assets such as bankruptcy claims, private company stock and toxic assets.
Mr Silbert said hedge funds, municipal bond investors and other institutions were interested. Trading volume will depend on how many IOUs the state issues and how long banks accept IOUs for deposit at face value.
[...]
Because the IOUs are to be repaid in just a few months, a buyer now at even 99 cents on the dollar would get an annual yield of more than 7 per cent, said Matt Fabian, managing director at Municipal Market Advisors.
Read the complete story at FT.com
HI,
Nice description I am exited to read the whole blog
Regards,