A Bad Bank's Surprise Success Sparks Scramble for Juicy Trade

Enter a keyword

Investors who were bold or lucky enough to buy a little-known, opaque and illiquid vestige of one of Europe’s most dramatic bank failures may make a killing. Their good fortune is another odd twist in the wild history of Hypo Alpe-Adria-Bank International AG, the Austrian lender that nearly collapsed under bad loans piled up in a state-sponsored buying spree in the former Yugoslavia, Bloomberg News reported. While the bank’s rescue, breakup and liquidation cost German and Austrian taxpayers billions of euros, ended political careers and put bankers in jail, its newfound success in offloading assets is reaping rich returns for investors. Distressed debt specialists, looking at robust gains in the last year in an instrument -- a kind of warrant -- linked to the ability of Hypo Alpe and its bad-bank successor Heta Asset Resolution AG to dispose of assets, are hankering for more of it. Read more

Location