by Calculated Risk on 12/06/2007 10:23:00 PM

From the Financial Times: Rabobank bails out SIV

Rabobank on Thursday ... bail[ed] out a troubled structured investment vehicle ... The Dutch bank plans to take assets worth €5.2bn ($7.6bn) on to its balance sheet to prevent a fire sale of Tango Finance.

The bank, which manages the SIV with Citigroup, has already sold almost half the vehicle’s assets because it could not find sufficient funding. ...

Eddie Villiers, responsible for European sales at Rabobank, said: "The current SIV business model is dead and so there is no prospect of its survival in its current form."

“Our decision has been made purely for liquidity reasons as the assets in the portfolio are of high quality, but there is no market for asset-backed commercial paper for SIVs. We have done this for reputational reasons as our exposure to the SIV is small,” Mr Villiers said.

Memo to Paulson and Citigroup: SIVs are dead.