P. M. BRIEFING : S&L; Liquidates Its Junk Bonds
American Savings Bank completed the liquidation of its $400-million junk-bond portfolio last month, a spokeswoman for the privately held thrift disclosed today.
Spokeswoman Dianne S. Nelson said the Irvine-based thrift has not determined the cost of the liquidation, but said a reported estimate of a loss of $125 million was probably “too high.”
American, a 177-branch thrift that was acquired in late 1988 by Texas financier Robert Bass, bought the portfolio last spring and summer before Congress banned thrift ownership of junk bonds as part of the savings and loan bailout legislation. The portfolio had a peak value of $493 million, Nelson said, making American one of the largest holders of junk bonds among thrifts.