End In Sight For Subprime Lending-Related Writedowns
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S&P analyst Scott Bugie said in a statement Thursday that 'the positive news is that, in our opinion, the global financial sector appears to have already disclosed the majority of valuation writedowns' which are subprime lending related. He cautioned, however, that further writedowns for other debt (like LBO lending) is likely to increase. Bugie continued by stressing that he felt that most of the pain experienced by some of the firms which have already suffered huge subprime writedowns is behind them. 'Indeed', he said, 'these institutions may benefit from future recoveries in market prices if the performance of subprime borrowers stabilizes and risk premiums for uncertainties dissipate'.
Associated Press reports that shares in Amsterdam-listed Carlyle Capital fell 90% Thursday, on news that the fund had been unable to agree a way forward with lenders, who have now started to liquidate assets. David Rubenstein, co-founder of the Carlyle Group, has said that he is looking at ways the Group can compensate Carlyle Capital investors for their losses, saying 'we have stood behind our products in the past'. He also said that he felt that 'in terms of Carlyle's reputation, I can't say today is our finest hour. But when you look at people in the financial world, even Warren Buffett has had problems. George Soros had problems. The reason people get their reputations is how they handle adversity.....I don't think one fund out of 60 will spoil a reputation built up over 20 years'.
