RIVERWOODS, Ill. – Discover Financial Services, parent of Pulse EFT, said it expects to write down by as much as $31 million its investment in asset backed commercial paper, mostly backed by mortgages.
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The commercial paper was issued by Golden Key U.S. LLC.
The estimated charge for Discover will be between $18 million and $31 million, pretax.
The company’s original investment in the notes was $120.1 million. It recorded an $11.4 million write down of the investment in the quarter ended Nov. 30, 2007. The company expects the investment will be restructured by the issuer in the third or fourth quarter of 2008.
A restructuring or further deterioration in market conditions could result in further impairment, the company said.
