French bank BNP Paribas plans to unblock three of its investment funds, whose suspension earlier in the month sparked turmoil on global stock markets.
In a statement the bank said 'conditions had been met' for valuing them and that the funds would be unblocked on August 28 and 30.
The funds BNP Paribas ABS Euribor and BNP Paribas ABS Eonia will be unblocked on August 28, while Parvest Dynamic ABS will be unfrozen on August 30, the bank said in a statement.
On August 7 BNP Paribas suspended the funds, which had made investments linked to risky US sub-rime home loans, because of difficulties in valuing them.
The funds hold asset-backed securities (ABS), complicated financial instruments linked to home loans to borrowers with poor credit histories in the US.
Defaults by these borrowers have led to losses for many banks and investment funds and appetite for asset-backed securities linked to sub-prime loans has dried up. This led BNP Paribas to declare a total lack of liquidity in the market for ABSs, which meant it was impossible to value the assets.
Meanwhile, Dublin-based SachsenLB Europe has warned that it may have to have to liquidate the assets one of its funds if current market conditions continue. It said liquidity in credit markets had deteriorated significantly and it was looking at the options for its Sachsen Funding I.
It recently emerged that another fund operated by Dublin-based fund operated by Sachsen had to receive a multi-billion euro bail-out from German banks.
