Thursday, August 9, 2007

Debt Market Update - LIBOR Upswing

I got this update from Chatham Financial this morning:

As many of you may have already heard, 1M LIBOR opened up 19bps this morning. This is, of course, a very sudden change particularly after a very stable year of LIBOR trading in the low 5.30's. This market movement demonstrates the reaction of many dealer banks after BNP Paribas halted withdraws from 3 funds that hold US subprime mortgage investments and NIBC (a Dutch bank) announced US$189mm in actual losses. This is the first significant news of US subprime markets impacting European banks. The European Central Bank, responding to an urgent demand for cash from banks affected by the subprime mortgage collapse in the U.S., loaned $130.2 billion (EUR 94.8bn) to assuage a credit crunch. For your reference, below is a current chart of some of the numbers that you may be interested in. As always, please feel free to call Chatham to discuss further.

Chatham Financial
235 Whitehorse Lane
Kennett Square, PA 19348
T: 610.925.3120
F: 610.925.3125

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