BNP Paribas to reopen key funds
From Times Staff and Wire Reports
French banking giant BNP Paribas said Thursday that it would reopen next week three investment funds it had frozen Aug. 9 -- a decision that had triggered heavy selling in stock and bond markets worldwide on worries that the crisis in U.S. mortgage-backed securities was spreading far and wide.
BNP had told investors in the $2.2-billion funds that it was barring redemptions because it couldn’t value certain U.S. mortgage securities the funds held, as the market for those securities seized up on loan delinquency fears.
But BNP now says it has developed a method for determining prices for the securities.
The bank said it expected the value of the funds to be down 2% to 5% from their levels on Aug. 7.
