Barclays looking to sell £4bn of CDOs

12th Oct 2009 00:22

Banking giant Barclays is contemplating selling off another chunk of toxic assets.In a deal that has echoes of last month’s sale of $12.3bn of credit market assets to a new fund financed by Barclays, the UK bank is looking to remove £4bn of collateralised debt obligations from its balance sheet by selling them to Barclays traders.Collateralised debt obligations (CDOs) are complex financial instruments that are derived from a portfolio of fixed-income assets, and featured heavily in the first wave of panic in the banking industry in 2007.According to reports in the British financial press Barclays will also consider selling the assets to a third party buyer, although these are likely to be hard to find as demand for CDOs remains weak, despite signs in the banking industry of a recovery in the appetite for riskier investments.