pafc united,Just cause no one answered your question.It means...

pafc united,

Just cause no one answered your question.

It means they are trying to offload the risk to another institution. For example if the loan was for $50m and earning 10% return then each dollar of debt is worth $1.00 plus the interest you will earn over the life of the loan.

CSFB (if this is true) don't think they can get all the money back from the loan as they don't think RED currently have the ability to repay it. So instead of carrying out a $50m loss and loss of interest, they are trying to find someone in the market who is willing to buy the debt for a price.

If someone offered them 50 cents in the dollar, they book a $25m loss (better than $50m) and earn no interest either. The loan is then someone else's responsibility to try and get repaid.

The same happens with the collection companies when they buy small debts from guys like Telstra (when you just stop paying your bills). Telstra books a loss but not as much as they would have if they stopped chasing the money they are owned altogether.

Hopefully that helps