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Lehman Brothers, the Wall Street firm that everyone has had their eye on since the implosion of Bear Stearns will report a $2.8 billion loss for the quarter and announce plans to raise $6 billion in capital through the sale of stock. Lehman bet heavily on the mortgage business with purchases of both subprime lender BNC Mortgage and alt-a lender Aurora (both of which they closed update, thanks Candy: Aurora Loan Services is still operating a Retail division. The Correspondent and Broker divisions have been shut down. In addition, they are still operating as a servicer as well.) as well as a big-time MBS book.
The firm did cut $130 billion worth of risky assets in an attempt to shake the “Bear Stearns” stigma.
From Bloomberg:
Lehman Brothers Holdings Inc. reported a $2.8 billion second-quarter loss, the company’s first since going public in 1994, and plans to raise $6 billion to help it survive the collapse of the mortgage market.
The fourth-largest U.S. securities firm fell as much as 11 percent in New York trading after saying in a statement it would sell common and preferred shares. The New York-based company sold about $130 billion of assets in the quarter and cut mortgage-related holdings and leveraged loans by 20 percent.
“It’s kind of sobering for people who have been listening to the company these last six to nine months that they had everything under control,” said David Hendler, an analyst at CreditSights Inc. in New York. “It shows that the market continues to be difficult. I would say Lehman’s probably not the only broker that has these kinds of pressures.”
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
- Roubini: No confidence in government exit strategy - June 24th, 2009
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