BNP Paribas suspends three funds

9 August 2007

BNP Paribas has suspended three of its funds, citing problems in the US subprime mortgage market.

The suspension is on a temporary basis and will affect the Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas Eonia funds, the French bank has stated.

A statement from BNP said that the decision had been made due to the "complete evaporation of liquidity in certain market segments of the U.S. securitisation market has made it impossible to value certain assets fairly regardless of their quality or credit rating."

A resumption of valuation of the funds is expected when there is more liquidity in the market, the statement added.

News of the suspensions comes as Union Investment Management GmbH and Frankfurt Trust both brought a halt to redemptions from funds that had heavily invested in the US mortgage market.

Meanwhile, two funds overseen by Bear Stearns, with a high level of exposure to the US mortgage market, have recently collapsed amid sustained losses.

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