Axon Cut to Default. MBIA Winds Down Hudson Thames

Reueters-

Standard & Poor's on Tuesday said it cut its ratings on Structured Investment Vehicle (SIV) manager Axon to default, after Axon said the deals' assets were insufficient to repay senior liabilities, triggering a liquidation.

The Axon Financial Fund has(had) $12.182B in assets on July 31, 2007.
Where did your money market funds invest?

Also-

Bloomberg-

MBIA Inc., the largest bond insurer, is winding down its structured investment vehicle after failing to find buyers for the SIV's short-term debt since August, Chief Financial Officer Chuck Chaplin said.

MBIA has shrunk its Hudson Thames Capital SIV to about $400 million from $2 billion through asset sales to bondholders, Chaplin said. The Armonk, New York-based company has taken an ``impairment'' on its own $15.8 million equity stake, Chaplin told a conference hosted by Bank of America Corp. in New York today.

'Failing to find buyers since August'? Holy Shit.

To unwind(outwind) the fund, apparently they are using the so called "Vertical Slice" deal which "asks holders of the capital notes to buy a share of the asset backed securities in proportion to the debt they own".

Here's the beauty in this: Instead of getting together and creating a SuperSiv(a vehicle that uses borrowed money to purchase asset backed securities from other Siv's to avoid a firesale), we are effectively creating the MiniSiv (an equity stake guy who ponies up some money, (possibly borrowed) to purchase asset backed securities from a Siv to avoid a firesale).