- PARIS (Thomson Financial) - BNP Paribas unit BNP Paribas Investment
Partners said today it has suspended the calculation of net asset value on three
funds invested in asset-backed securities, due to a "complete evaporation of
liquidity in certain segments of the US securitisation market".
The funds -- Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas
ABS Eonia -- will accept no redemptions or subscriptions until further notice,
BNP said.
Asset-backed securities or ABS are financial instruments collateralized by
cash flows from a pool of underlying assets such as consumer loans and
mortgages.
However, recent anxieties over defaults on high-risk or sub-prime mortgages,
have substantially reduced the appetite for this type of security in the
financial markets.
According to BNP Paribas Investment Partners, the resulting "evaporation of
liquidity" means it can no longer calculate the fair value of the underlying ABS
in the three funds in question, making it impossible to calculate their net
asset value reliably.
BNP said it will provide further information on the situation in a month's
time, and will resume calculation of the NAV "as soon as liquidity returns to
the market".
vicky.buffery@thomson.com
vb/slm
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COPYRIGHT
Copyright AFX News Limited 2007. All rights reserved.
The copying, republication or redistribution of AFX News Content, including by
framing or similar means, is expressly prohibited without the prior written
consent of AFX News.
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