Pimco’s Bill Gross may have been lucky ($1.7bn lucky) when it comes to Fannie and Freddie. Will he be so lucky with his Lehman bonds?
CreditSights is saying holders of senior unsecured debt may get 60 – 80 cents to the dollar.
Societe Generale’s Ciaran O’Hagan sees it thusly:
Bond by bond, we can go thru LEH and see who holds what. See [below] who owns LEHMAN BROS HLDG LEH Float 11/09 using the PHDC1 function on Bloomberg. There are other tools giving yet more holdings (Mutuals, insurance etc are required to declare holdings, but may not be up to date). Some 150bn+ outstanding of LEH bonds are owned by somebody, so the market is going to lose 93bn, assuming e.g. 40% recovery. These losses look set to be widespread, hutting the public thru their mutual and pension funds, as the image attached illustrates. Clearly a disaster for public confidence, and it is early days yet.
Related links
Fannie & Freddie: A tale of two Bills – FT Alphaville
Bragging Bill Gross – Felix Salmon