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March 30, 2008

Bonds and Loans at ‘Stupid’ Prices

Centaurus Capital Ltd’s chairman and CEO, Bernard Oppetit, said he is buying loans and bonds being sold off by banks and rival funds.

“We are seeing some credit and bonds trading at stupid prices,” Oppetit, the $4 billion London-based hedge fund’s founder said in an interview on March, 28. “There are a lot of people forced to liquidate their positions. There’s been a real crash. It’s the worst I’ ve seen as far as I can remember.”

Although Oppetit confirmed that he is not buying mortgage – backed debt, he did not want to be more specific about Centaurus Capital’s investments. He said however, that he is finding more value in senior secured loans than bonds.

Loans and bonds are trading at very low prices, due to lack of liquidity in the market. But given the market crash, how easy is it to tell which one is a bargain or a rip-off?

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