Bear Stearns funds have "lost almost all value"

The bank told investors yesterday the High-Grade Structured Credit Strategies Enhanced Leverage Fund had effectively no value left, and the High-Grade Structured Credit Strategies Fund had enough to pay investors only nine cents on the dollar.

The second fund will repay Bear Stearns, the senior creditor, $1.4 billion in emergency funding that it received last month, but it is not known whether there will be enough left over to repay investors.

The bank blamed the failure on sharp increases in defaults and payment delays on subprime US mortgages, which led to margin calls from creditors.

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