Bloomberg News reports that a small group of firms that waded into the morass in the aftermath of the financial crisis, including Paulson, King Street Capital Management, Varde Partners, Halcyon Asset Management and Solus Alternative Asset Management have made billions of dollars trading in the debt.
As claims are being paid out, often at a multiple of initial estimates, investors that have spent years analysing the bankruptcy are ploughing money back into newly available loans, such as those between the investment bank’s Hong Kong and U.S. units, fueling a rally unmatched by stocks and high-risk bonds.
'A little of a surprising aspect is that there’s still this much return left in it this far along', according to Marcia Page, co-chief investment officer of Varde, which oversees $8.5bn and has been buying Lehman claims since 2008. 'There’s just so much debt'.
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