Bayview hedge fund’s trades with lenders point to return of crisis-era structures

Bayview hedge fund’s trades with lenders point to return of crisis-era structures

Bayview Asset Management structured $642 million in complex re-securitization trades
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In a significant move reminiscent of pre-2008 financial practices, Bayview Asset Management structured $642 million in complex re-securitization trades, selling insurance to Huntington and Sofi against loan losses. These transactions, echoing collateralized debt obligations, raise concerns about their potential to obscure banking system risks. While featuring more safeguards than past deals, experts caution they may still hide vulnerabilities, highlighting the need for increased transparency and regulatory oversight.

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By Shankar Ramakrishnan

Earlier this year a hedge fund structured two trades worth $642 million, the kinds of which have not been seen since the 2008 crisis. It sold insurance to two U.S. lenders against losses on a loan portfolio, and then sold much of that risk to investors.  

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