Distressed Buyers Hit Roadblocks

September 8, 2008

Much has been said about the emergence of distressed funds taking advantage of buying opportunities in the European market. However, market analysts said that prices must go wider before distressed buying really takes off. Worldwide subprime losses have now grown to a cumulative $342.9 billion, of which Ä155.5 billion ($224.5 billion) is attributed to Europe. UBS tops the list with a Ä29.9 billion loss. The European market has started to experience increased negative rating migration on the back of weakening in certain market segments like the Spanish RMBS market and U.K. CMBS. Increasingly punitive revisions of rating criteria have also contributed to downgrades in recent months.

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