Washington Mutual issued 6 billion euros of covered bonds in 2006. The aim of the event is to ask whether these bonds in late 2008 are incorrect. The case is set in September 2008, Washington Mutual and faces considerable difficulties due to increasing losses on their mortgage portfolios. According to investment bank Lehman Brothers Chapter 11 bankruptcy protection filing in mid-September, the price of Covered Bonds Washington Mutual has fallen to 75 per 100 face value. Since these bonds are over … Read more »

Washington Mutual issued 6 billion euros of covered bonds in 2006. The aim of the event is to ask whether these bonds in late 2008 are incorrect. The case is set in September 2008, Washington Mutual and faces considerable difficulties due to increasing losses on their mortgage portfolios. According to investment bank Lehman Brothers Chapter 11 bankruptcy protection filing in mid-September, the price of Covered Bonds Washington Mutual has fallen to 75 per 100 face value. Since these bonds are overcollateralized, the case asks students to evaluate the underlying collateral portfolio in the event of the liquidation and the assessment of the probability of different outcomes. The event will take place during a period of considerable uncertainty in global capital markets.
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from
Daniel B. Bergstresser,
Robin Greenwood,
James Quinn
Source: Harvard Business School
24 pages.
Release Date: 13 March 2009. Prod #: 209093-PDF-ENG
Washington Mutual Covered Bonds HBR case solution