More certainty on toxic credit valuations?

The truth hurts; at least it can when it comes to valuations of structured credit products. We're seeing a host of activity these days that seems to be placing a more realistic valuation on certain mortgage-related securities, notes the Financial Times. The sale of various residential mortgage-related CDOs by Merrill Lynch to Lone Star set 22 cents to the dollar as a benchmark of sorts. Of course, the composition of the portfolio is the key issue, but 22 cents offers a signpost at least. Meanwhile, Goldman Sachs and Deloitte are conducting a series of structured investment vehicle auctions that many are looking to for clues as to the fair value of such assets. The early indications are that bidding for the most troubled assets are in line with the Merrill-Lone Star transaction. Some assets are faring better. Commercial mortgage-backed securities were sold in the low 80s; real estate CDOs were sold in the high 60s, the FT reports.  

For more:
- here's the FT article

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