Hedge fund’s trades with lenders point to return of crisis-era structures

June 18 (Reuters) – Earlier this year a hedge fund structured two trades worth $642 million, the kinds of which have not been seen since the 2008 crisis. It sold insurance to two U.S. lenders against losses on a loan portfolio, and then sold much of that risk to investors.

The trades, a form of re-securitization, were done by Bayview Asset Management after it sold credit default swaps (CDS) to Huntington (HBAN.O), opens new tab and Sofi (SOFI.O), opens new tab late last year, according to Moody’s reports about the trades seen by Reuters and a person familiar with the transactions.