HSBC to start selling £25bn of toxic US debt
The bank is planning to sell four sub-prime loan portfolios worth a total of $2.7bn in the next year, with hedge funds already expressing an interest, according to the Daily Telegraph.
The disposals will mark the first time HSBC has sold any of its holding of sub-prime debt since the collapse of Lehman Brothers in September 2008 and is intended to kick off the sale of the $44.2bn of toxic debt still held by the bank.
HSBC was one of the first banks to recognise the problems in the US sub-prime housing market, where millions of Americans were given loans to buy properties they could not afford.
The bank’s warning in February 2007 of the large losses it said it expected to take on the low-quality mortgages precipitated the credit crunch.