LONDON (Dow Jones)--Cheyne Finance, a $6.6bn (€4.8bn) structured investment vehicle managed by London-based hedge fund group Cheyne Capital Management, Wednesday said it has drawn down all three of its liquidity lines and started selling assets, adding to a rush on forced sales of US residential mortgage-backed securities and other types of debt that recently have fallen in value.

In a statement to the Irish Stock Exchange, where one main component of the vehicle is registered, Cheyne Finance said it breached tests on Tuesday measuring the value of its assets against its liabilities, meaning it must start selling assets to repay its debtholders.