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French Number Two (snicker) Bails Out its SIV

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December 10, 2007 – Comments (0)

Nothing to see here, either.

The move will cause the group's Tier 1 ratio, a measure of financial strength, to fall 5 basis points, Societe Generale said.

"This is obviously bad news," Pierre Chedeville of CM-CIC Securities said. "But, above all, it shows that the crisis is not over yet, contrary to what some people thought."

Societe Generale said it remains confident in the underlying quality of PACE assets, which it is consolidating.

Bonds backed by home loans, including subprime debt, make up 12 percent of PACE's holdings, Societe Generale said. Another 19 percent of the holdings are collateralized debt obligations, and other types of debt or bonds backed by debt such as student loans.

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