BANKAMERICA: TO LIQUIDATE SHAW HEDGE FUND $20 BLN FIXED-INCOME POSITION
NEW YORK (MktNews) - BankAmerica Corp. confirmed Wednesday that it charged off $372 million in a credit to D.E. Shaw & Co., a hedge fund, and that the fund still owes BankAmerica $1 billion.
The bank said it was buying about $20 billion in fixed-income securities "along with the related hedge positions" from Shaw, and planned to liquidate the position in a "restructuring" of its relationship with the hedge fund.
The comments appear in BankAmerica's third-quarter earnings report released early Wednesday, but a bank spokesman explained that the figures refer to the bank's dealings with Shaw.
"In addition, the company has approximately $400 million in hedge fund exposure, which is substantially collateralized," the earnings report read.
The loan to Shaw was extended by Bank of America prior to its recent merger with NationsBank.
The BankAmerica spokesman, Robert Stickler, declined to say whether the fixed-income positions represented longs or shorts.
"We don't know. We don't have that level of detail," Stickler said, adding, "we don't have it yet, so we don't have it to sell." ** New York newsroom 212 509 9270 **
13:35 EDT 10/14
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