When Citi, Merrill Lynch, Lehman Brothers and Sumitomo last week sold a $1bn (€720m) debt tranche they held from the buyout of car parts supplier Allison Transmission, they took a sharp cut: they agreed to sell the debt for 96 cents in the dollar, or $40m less than they hoped for. The banks are also holding another $2.6bn of Allison's debt.

To help assuage buyers' fears that the banks might dump the debt at a lower price, they agreed to keep Allison's remaining debt for 60 days. If they sell it after two months, all four must act together and they cannot sell the loans for less than 96 cents in the dollar.