The Banking and Strategy Initiative

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Morgan Stanley – MBIA deal, MF Global to get bankruptcy funding

Both the bewitched babies in the woods, Morgan Stanley and MF Global got over a little of their troubles for cash. Even as new investigations explore Jp Morgan’s role and the use of customer funds as margin at MF Global, Morgan Stanley signed a $1.2 bln cash settlement with MBIA receiving the amount in cash to cover older uncollateralised contracts as it signed a deal with the bond insurer to get out of its way in the suit regarding the split of MBIA’s business that banks want. MBIA in turn will withdraw from a $223 mln suit aggainst Morgan Stanley to recover money on its $223 mln Residential Mortgage based Securities

MF Global on the other hand expects the trustee’s requirement to pay investors 70% of the $1.2 bln of the lost customer money ( likely to be distributed in the next 3 months based on what has already been found) Thus MF Global will get access to its assets as it seeks funding ptions unabvailable without those assets, even to fund its bankruptcy expenses,, as reported on Insider by Reuters’ Nick Brown

 

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This entry was posted on December 14, 2011 by in Banking, Financial Markets, Financial Services, Investments, US and tagged , , , , , , , .

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