A Long Spill
August 15, 2007 – The U.S. sub-prime mortgage crisis has spilled all the way across the pond. NIBC, a Dutch merchant bank owned by a group led by private equity firm JC Flowers, announced a 137 million euro loss on its U.S. asset-backed securities portfolio last week. NIBC said the portfolio was worth 390 million euros in total. While possibly unconnected, the loss has provided an entrée for Iceland’s Kaupthing Bank to acquire NIBC (less the troubled portfolio) for 3 billion euros. Iceland’s banks have been expanding overseas to diversify income streams and expand the deposit base; NIBC aligns well with that goal. In the meantime, JC Flowers continues to hold the sub-prime portfolio.
Posted by Ali Raza on Friday, August 24, 2007