Credit Market Fall-Out #1 – Fire Sales Continue

My friends at Calcualted Risk is the first place I saw this article.

The following from the DJ Newswire is interesting because it gives some of the details as to the selling price of some bonds. As you can see the discounts are pretty steep. I am sure that we will see more of these in the future.

Amid continued concerns about subprime mortgages, a broker dealer is circulating offerings for subprime mortgage-backed bonds - cheap, according to a source familiar with the offerings.
The low prices of the bonds may point to a continued broad-based cheapening of the whole subprime sector.

Offering sheets list prices and identify the company that is selling the bonds.

The offering was for 11 different classes of bonds totalling $82 million, including $10 million in below-investment-grade subprime mortgage-backed bonds from an Ameriquest Mortgage issuer at 58 cents on the dollar.

Other below-investment-grade bonds from separate issuers were listed as sold, with final offering prices for two such bonds listed at 45 cents and 28 cents on the dollar. There was also $32 million in AAA-rated bonds listed at 92 cents on the dollar.