In a sign that the market believes administrators will extract some value from the wreckage, funds have bought up billions of pounds worth of Lehman Brothers' debt.
By Helia Ebrahimi, Senior City Correspondent Published: 9:16PM BST 13 Sep 2009
There are hundreds of thousands of Lehman derivative positions where counterparties have claims.
But the creditors have to wait for the administrator to untangle the assets left in the wake of the bank's collapse.
Related Articles Barack Obama to push for banking overhaul Derivatives still pose huge risk, says BIS Now, for the first time, funds have begun buying those positions. There are 10 different Lehman derivatives books being traded, with prices as low as 15 cents in the dollar and up to 50 cents in one case.
Tony Lomas, a partner at PWC and lead administrator on Lehman in Europe said interest from distressed debt traders had ballooned in the last month.
"They are all looking for the Lehman pot of gold – and for them the return could be massive."
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