Will Goldman Sachs lose money on New Century?

In the wake of New Century's bankruptcy, Robert Lindsay gets his hands on the official list of the company's biggest creditors. At the top of the list is Goldman Sachs, followed by Credit Suisse and a who's-who of other big investment-banking names: Morgan Stanley, Deutsche, BofA, UBS, Lehman, Citigroup. Loan house C-Bass is in the #3 spot.

Most of these creditors have secured loans to New Century, and one of them, Barclays, tells Lindsay that "the vast majority of our exposure to all US sub-prime lenders is fully collateralised and short-term, pending distribution. We do not anticipate any material losses to arise from our exposure to the sector."

There's no indication of how big New Century's obligations are, and my feeling is that by the time the company's assets are sold off, the secured creditors are unlikely to be seriously hurt. But for those of a conspiratorial bent, Lindsay notes that Goldman executive Kathleen Brown "left late last Friday without any explanation". Did she have anything to do with New Century? It's unclear.

(Via)