Peregrine Indonesia bonds fail to be sold

Liquidator Price Waterhouse has raised US$260 million settling derivative positions of Peregrine Fixed Income, but sold none of the largely Indonesian corporate bond portfolio at the centre of the group's collapse.

More than 2,000 derivative contracts involving 300 counterparties have been traced, although many remain live - making a definitive picture of the fixed-income unit's liabilities impossible, according to Price Waterhouse.

There was no precedent for liquidating a derivative trading investment bank, but 'order has been achieved where there was chaos', said partner Stephen Caswell.

Last week saw the first legal action from a creditor bank, with Commerzbank seeking US$40 million for a cross-currency swap entered two days before Peregrine went bust.

The German bank wanted to establish a 'proprietorial claim' but the liquidator contended it must line up with other creditors, Mr Caswell said.

Legal interpretation of derivative contracts has formed the most complex part of the liquidation process, according to Price Waterhouse partner Simon Copley.

While master documents - such as those used by the International Swaps Dealers' Association - had clauses closing the position should one party go under, much of Peregrine's derivative book was not subject to such standard codes.