Lehman moves to quiet rumors of collapse
June 5, 2008 by Tisa Silver
Filed under Finance
One of the nation’s largest investment banks has taken major steps to silence rumors of an impending Bear Stearns-esque collapse.
Lehman Brothers Holdings firmed up its balance sheet by cutting its risky debt positions by 25 percent. In addition to selling off debt, the firm raised $8 billion in capital.
Many investment banks are fleeing from risky, mortgage related debt like the plague. So who bought over $100 billion of these risky securities from Lehman?
One buyer is Loomis Sayles, a fund manager with a portfolio of more than $100 billion in bonds. Lehman reps have also met with potential buyers at BlackRock. BlackRock merged with Merrill Lynch in 2006 and has been buying up risky debt as of late. Coincidentally, Merrill Lynch just upgraded shares of Lehman from “underperform” to “buy.”
News of the risk reduction moves sent Lehman shares up three percent. Certainly, the Merrill Lynch upgrade helped the positive momentum.
Mighty timely upgrade…
Comments
One Response to “Lehman moves to quiet rumors of collapse”Trackbacks
Check out what others are saying about this post...[...] that Lehman has been making is to get rid of risky debt. In this, Lehman has already had some help. Talk Stock Trading reports on a recent bond sale by Lehman: One buyer is Loomis Sayles, a fund manager with a portfolio of more than $100 billion in bonds. [...]