Credit Suisse, Lone Star To Buy Fortis Bad Bank

Money On Hook

Credit Suisse and Texas- based Lone Star Funds will pay $8.7bn for the assets of Royal Park Investments SA, a vehicle set up to manage toxic assets of failed Belgian bank Fortis.

Bloomberg reports that Belgium, one of the vehicle’s shareholders, will get $1.3bn in cash from the sale, reducing government debt by more than 0.2% of gross domestic product, Finance Minister Koen Geens said in an e-mailed statement from Brussels Saturday.

Ageas, the insurer formerly known as Fortis, will receive $1.35bn, it said in a separate statement.

Royal Park Investments was set up in May 2009 by Fortis, the Belgian government and French bank BNP Paribas as a special purpose vehicle to manage a pool of distressed debt securities. The shareholders contributed $2.2bn in equity at the time. That amount had increased to a net asset value of $2.99bn, Royal Park Investments said.

Fortis, once Belgium’s biggest financial-services company, became a casualty of the 2008 financial turmoil after pouring $31.5bn into purchasing the assets of ABN Amro Holding NV a year earlier, just as the U.S. subprime-mortgage market collapsed and lending dried up.

Hit the link below to access the complete Bloomberg article:

Credit Suisse, Lone Star to Buy Fortis Bad Bank

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