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Tue 06 Jun 2008M&T sues Deutsche Bank and HBK
Deutsche Bank AG and HBK Investments inflated the value of collateralized debt obligations they sold to M&T Bank, leading to more than $80 million of losses, M&T has claimed in a lawsuit.
M&T, in which AIB has a 24 per cent stake, said in a lawsuit filed last night in New York Supreme Court the value of CDOs bought for $82 million from Deutsche Bank in February 2007 has dropped to about $1 million this year.
HBK, the Dallas-based hedge fund, is the collateral manager for the CDOs, M&T said.
CDOs were at the epicenter of turmoil in the credit markets last year because they packaged low-rated bonds composed of subprime mortgages, creating securities that received AAA ratings.
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