New York
IN recent years, Wall Street firms have reaped big profits in the scrappy reaches of the credit markets, selling the debt of companies with weak credit ratings to investors who crave higher returns.
But now, as investors have suddenly grown skittish, some big Wall Street banks have been stuck with piles of debt that they are struggling to sell. As a result, they are starting to book multimillion-dollar losses as they write down the value of these positions.
The investment banks that focus on this market appear to be sitting on potential losses that may exceed US$600 million, according to an analysis by debt market specialists of several deals that are struggling. These deals have not closed...
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