JP Morgan top Q4 2008 overall corp bond underwriter

Mon Dec 29, 2008 9:15am EST

 Dec 29 (Reuters) - Thomson Reuters Fixed Income Data/EJV on
Monday released the following table of the top Q4 2008 U.S.
underwriters of overall corporate bonds. The table includes
investment grade and high-yield corporate bonds issued in the
U.S.:
Q4 2008 OVERALL CORP BONDS BOOKRUNNERS

                            Volume      # of       PERCENT
Rank  Bookrunner           (in U.S. dlrs)  Issues   MARKET
SHARE
1    JP Morgan            11,090,575,235     52         16
2    Citi                  8,473,003,012     37         12
3    Bank of America       8,100,783,065     39         12
4    Goldman Sachs & Co    7,042,578,851     28         10
5    Barclays Bank Plc     5,631,656,595     23          8
6    Deutsche Bank         5,559,925,419     27          8
7    Morgan Stanley        5,113,027,407     25          7
8    Credit Suisse         4,209,511,863     19          6
9    Royal Bank Scotland   3,712,571,149     23          5
10    Merrill Lynch & Co    2,955,455,550      6          4
11    UBS AG                2,340,484,357     13          3
12    HSBC Banking Group    1,731,948,050      6          2
13    Mizuho Financial Group  865,709,917      6          1
14    Bank of Nova Scotia     730,288,702     10          1
15    Wachovia Securities     657,584,083      4          1
--------------------------------------------------------------
2008 OVERALL CORP BONDS BOOKRUNNERS
1    JP Morgan            98,725,154,312    354         15
2    Citi                 91,547,661,218    275         14
3    Bank of America      77,380,833,903    279         12
4    Barclays Bank Plc    66,935,422,627    241         10
5    Morgan Stanley       53,335,271,862    177          8
6    Goldman Sachs & Co   51,698,832,232    174          8
7    Merrill Lynch & Co   48,429,984,400    146          7
8    Credit Suisse        34,608,419,704    127          5
9    Deutsche Bank        31,707,974,400    137          5
10    Wachovia Securities  26,817,469,492    103          4
11    UBS AG               21,189,728,381    101          3
12    Royal Bank Scotland  20,627,149,607    109          3
13    HSBC Banking Group   12,669,599,337     50          2
14    BNP Paribas           8,348,022,085     43          1
15    RBC Capital Markets   2,035,962,841     16          0
------------------------------------------------------------------------------
Source: Thomson Reuters Fixed Income Data/EJV
League tables are compiled from Thomson Reuters comprehensive
fixed income database, EJV. Bond criteria for the tables are
established and published in cooperation with bond
underwriters. Sovereign and emerging market high-yield bonds
are excluded from the tables. All underlying data are made
available to bond underwriters to ensure market transparency.
For more information regarding criteria and data contributions,
please contact Maria Dikeos at 646 223-6820 or Aimee Webster at
646 223-6816. For access to Thomson Reuters fixed income data,
please contact your Thomson Reuters representative or visit us
here.

Banks' exposure to Lehman emerges

The financial impact of the demise of Lehman Brothers is emerging as firms worldwide state their degree of exposure to the bankrupt firm.

Three Chinese banks have some $297.4m (£166.1m) in Lehman Brothers bonds, state media and local reports said.

Swiss Life said it had exposure of $20m Swiss francs (£9.9m) and Swiss Re had exposure of 50m Swiss francs.

German bank KfW transferred 300m euros (£237m) to Lehman after it collapsed on Monday, local media reported.

However, a spokesperson for KfW said the transfer had been done in error.

"There was an erroneous swap payment on Monday... for reasons for which are being investigated internally", the company told the Frankfurter Allgemeine Zeitung newspaper.

Lehman Brothers collapsed after seeing billions of dollars of losses in the US mortgage market.

UK deal

Of China's exposure, Industrial & Commercial Bank said it owns Lehman bonds worth $151.8m, according to the Xinhua agency, while Bank of China has $75.6m in bonds and China Merchants Bank had $70m in Lehman bonds.

Meanwhile, UBS said on Tuesday that its exposure to Lehman Brothers was less than $300m.

But Japanese firms' total Lehman exposure was far greater at 440bn yen (£2.3bn), according to an earlier Kyodo news report.

Bank of Japan governor Masaaki Shirakawa that while Lehman's collapse would harm Japanese firms, those hit had enough funds to cover losses.

"I am not concerned that the recent events will destabilise the financial system in Japan," he said.

The news comes as UK bank Barclays has acquired certain core assets of Lehman Brothers for $1.75bn.

Barclays bought Lehman's North American investment banking and trading unit for $250m, and paid $1.5bn for its New York headquarters and two data centres.

The administrators, PricewaterhouseCoopers, said it had a keen interest in developments with Lehman Brothers in the US.

The administrator said that all UK employees at Lehman still attending work will be paid by the end of the month.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7621609.stm

Published: 2008/09/17 17:51:54 GMT

Morgan Stanley tries to restore 'sanity' to market

Reporting its results a day early, the investment bank handily beats earnings forecasts but the stock still fell after hours.

By David Ellis, CNNMoney.com staff writer

Last Updated: September 16, 2008: 6:33 PM EDT

NEW YORK (CNNMoney.com) -- Morgan Stanley offered up some much-needed good news late Tuesday, reporting better-than-expected quarterly results a day in advance.

The nation's No. 2 investment bank posted a net profit of $1.43 billion, or $1.32 per share, during the third quarter ending in August, down almost 8% from a year ago.

The numbers, however, were much better than forecasted - analysts were anticipating a profit of just $869 million, or 77 cents a share, according to Thomson Reuters.

The company also reported sales of $8 billion in the quarter, a slight increase from the same period last year, but much higher than the $6.3 billion in revenue that Wall Street was expecting.

Morgan Stanley (MS, Fortune 500) shares, which finished 11% lower in regular trading Tuesday, fell another 3% after-hours.

Colm Kelleher, Morgan Stanley's chief financial officer, said the firm felt compelled to report a day early given some of the developments and rumors that have swirled around the financial services industry in recent days.

The New York City-based firm was originally scheduled to report its results before Wednesday's market open.

"It is very important to get some sanity back into the market," Kelleher said in a conference call with analysts.

Just a day earlier, fellow investment bank Lehman Brothers (LEH, Fortune 500) filed for bankruptcy Monday, marking the biggest ever in U.S. corporate history.

Merrill Lynch (MER, Fortune 500), a Wall Street icon itself, announced plans to be acquired for some $50 billion by Bank of America (BAC, Fortune 500), after enduring billions of dollars in losses as a result of ambitious bets on the U.S. mortgage market.

There have also been increasing fears about the health of the insurance giant American International Group (AIG, Fortune 500), which is scrambling to raise much needed cash.

Stocks finished higher in what turned out to another dramatic day on Wall Street, even though the Federal Reserve decided to keep its key short-term rate steady Tuesday afternoon. The market had been expecting a rate cut in light of the credit crisis facing the financial sector.

A closer look at the numbers

John Mack, Morgan Stanley's chairman and CEO, attributed Tuesday's results to strong performances across a number of the company's key divisions, including its commodities and foreign exchange businesses.

Just a quarter ago, the company saw its second-quarter profits plunge 57% due to lower investment banking and sales and trading activity.

The company's institutional securities division, which comprises the bulk of its business, managed to minimize the pain this quarter in those businesses as sales rose 19% to $5.9 billion.

Revenues in Morgan Stanley's other two core businesses - global wealth management and asset management - were down from a year ago.

The past three months have been difficult for securities firms. In addition to exposure to toxic mortgage-related assets, they have had to endure wild swings in the equity markets and a virtual halt in investment banking activity.

Goldman Sachs (GS, Fortune 500) confirmed that Tuesday morning when it reported its third-quarter results. The leading investment bank's profits fell 70% from a year ago -- but still managed to beat expectations.

Kelleher offered a tempered outlook of the company's prospects, saying that the remainder of the year will remain challenging.

He also defended the firm's investment bank structure, saying that the company did not plan to buy or merge with a commercial bank. Goldman Sachs' CFO made similar comments earlier Tuesday.

"We believe in the diverse business model of the investment bank and its ability to adapt to different environments," said Kelleher. "Depository institutions do not better enable us to execute our business and may bring with them their own set of complications."

First Published: September 16, 2008: 4:37 PM EDT

Goldman Sachs reports big profit plunge

Earnings sink 70% but beat analyst projections. Stock falls, but CEO insists that firm is 'well positioned.'

By David Ellis, CNNMoney.com staff writer

Last Updated: September 16, 2008: 10:49 AM EDT

NEW YORK (CNNMoney.com) -- Goldman Sachs reported a sharp decline in profits Tuesday that beat Wall Street's forecasts. But revenues missed analysts' estimates and the stock plunged in early trading.

The New York City-based investment bank said its profits fell 70% to $845 million, or $1.81 a share, during the third quarter ending in August. Just a year ago, the company reported a profit of from $2.85 billion, or $6.13 a share.

Wall Street was expecting a profit of $1.71 a share.

Net revenue tumbled more than 50% to $6.04 billion from $12.3 billion during the same period last year, missing projections of $6.2 billion.

Isabel Schauerte, an analyst with Celent, a Boston-based financial research and consulting firm noted the latest results from Goldman damage the firm's "aura of invulnerability."

"For the time being, the crisis of confidence weighs on the firm's earnings power and may potentially narrow its access to funding," Schauerte wrote in a research note.

With investment banking activity at a virtual standstill and financial markets in disarray, few were expecting a banner quarter for Goldman.

After declining 12% Monday -- one of the company's worst drops of the year as the Dow fell more than 500 points --Goldman (GS, Fortune 500) shares continued to decline Tuesday, falling 6% in late morning trading.

Investors were watching Goldman's results carefully in light of the rapidly changing financial landscape.

Fellow investment bank Lehman Brothers (LEH, Fortune 500) filed for bankruptcy Monday, marking the biggest ever in U.S. corporate history.

Merrill Lynch (MER, Fortune 500), a Wall Street icon known for its famous bull logo, also announced plans to be acquired for some $50 billion by Bank of America (BAC, Fortune 500), after enduring billions of dollars in losses as a result of ambitious bets on the U.S. mortgage market.

Goldman rival Morgan Stanley (MS, Fortune 500) is slated to report its quarterly results Wednesday.

Lloyd Blankfein, Goldman Sachs' chairman and CEO, described the quarter as challenging, blaming Tuesday's results on a decrease in client activity and declining asset valuations.

"Despite the deteriorating market conditions, the focus of our people and strength and breadth of our client franchise produced a solid performance in a tough environment," Blankfein said in a statement.

He added that the company remains "well-positioned to meet the needs of our clients and identify and act on the right market opportunities."

Investment banking, a cornerstone of the Goldman's business, was one of the hardest hit divisions of the company. Revenues in the division plunged 40% as advisory and underwriting activity stalled during the quarter.

But it was Goldman's trading and principal investment division, which includes the company's equity, fixed income, currency and commodities businesses, that suffered the most. Revenues fell by two thirds during the quarter to $2.7 billion.

Analysts warned ahead of Tuesday's earnings announcement that the division could see signs of strain since Goldman Sachs ties more of its business to the stock market than any of its peers.

Bucking the trend was the company's asset management and securities business, which reported a 4% increase in revenue during the quarter.

Despite this quarter's woes, Goldman continues to remain relatively well capitalized. The company said its Tier 1 capital ratio - a widely used measure of a bank's ability to absorb losses - stood at 11.6%, up from 10.8% in the previous quarter.

A Tier 1 capital ratio of above 8% is generally considered a good sign for financial institutions.

First Published: September 16, 2008: 8:37 AM EDT

Lehman Bros files for bankruptcy

The fourth-largest investment bank in the US, Lehman Brothers, says it will file for bankruptcy protection, amid a growing global financial crisis.

Lehman had incurred losses of billions of dollars in the US mortgage market.

The move threatens to deal a further blow to the global financial system, as banks unwind their deals with Lehman.

Merrill Lynch, also stung by the credit crunch, has agreed to be taken over by Bank of America in a dramatic weekend of events for Wall Street.

The chance that Lehman Brothers could collapse increased sharply after the strongest potential buyers pulled out at the weekend.

Greg Wood, the BBC's North America business correspondent, said that police had cordoned off the bank's headquarters in New York and staff were leaving with cardboard boxes as onlookers gathered to watch the bank's demise.

Lehman suffers nearly $4 billion loss

Wall Street firm reveals major restructuring: spin-off of commercial real estate assets and plan to sell stake in investment management division.

By David Ellis, CNNMoney.com staff writer

Last Updated: September 10, 2008: 9:09 AM EDT

NEW YORK (CNNMoney.com) -- Lehman Brothers suffered one of its worst quarterly losses in the company's history, reporting a loss of nearly $4 billion Wednesday, and announced a series of drastic steps aimed at reviving the beleaguered firm.

The firm said it would spin-off part of its commercial real estate assets, sell a majority stake of its investment management division and slash its annual dividend.

Following a wild market session Tuesday in which shares plunged 45% to their lowest levels in nearly a decade, Lehman (LEH, Fortune 500) announced a $3.9 billion fiscal third-quarter loss, or $5.92 a share Wednesday morning. It was Lehman's biggest quarterly loss since the firm went public in 1994, exceeding a $2.8 billion loss announced in June.

"This is an extraordinary time for our industry, and one of the toughest periods in the firm's history," Lehman Chairman and CEO Richard Fuld Jr. said in a statement.

In last year's third quarter, Lehman reported a profit of $870 million, or $1.54 a share.

Analysts were expecting the firm to report a $1.99 billion loss, or $3.35 a share, according to Thomson Reuters. The company had originally planned to release its results on Sept. 18.

Shares of Lehman gained nearly 12% in pre-market trading following the announcement.

The company's stock has plunged nearly 88% so far this year due to concerns about its ability to raise much needed capital.

A keystone of Lehman's restructuring plan included a drastic reduction in both its commercial and residential real estate holdings. Lehman said it would spin off the majority of the company's commercial real estate assets into a new separate public company dubbed Real Estate Investments Global.

The company trimmed its residential real estate holdings by nearly a half. Part of that included the planned sale of about $4 billion worth of U.K. residential real estate. Lehman said it was working with asset manager BlackRock (BLK, Fortune 500) on the sale and expected it to be completed in the coming weeks.

Lehman also announced its intention to sell a majority interest in its investment management division, which includes the profitable money manager Neuberger Berman. The firm is in advanced discussions with a number of potential partners for its investment management division and said it expected to announce details of the deal "in due course."

Also, in an effort to save $450 million, Lehman said it planned to reduce its annual dividend to 5 cents per share from 68 cents.

"The strategic initiatives we have announced today reflect our determination to fundamentally reposition Lehman Brothers by dramatically reducing balance sheet risk, reinforcing our focus on our client-facing businesses and returning the Firm to profitability," Fuld said.

Lehman shares plummeted just a day earlier following a report by Dow Jones that indicated talks between Lehman and Korea Development Bank had ended. It had been widely speculated in recent weeks that the state-run KDB was interested in buying a stake in Lehman.

The stock fell even further Tuesday after credit ratings agency Standard & Poor's said it was placing Lehman on its CreditWatch list with negative implications, suggesting that S&P may cut its rating on Lehman's debt.

S&P analysts Scott Sprinzen and Tanya Azarchs wrote in a research note that they were concerned by "heightened uncertainty about Lehman's ability to raise additional capital, based on the precipitous decline in its share price in recent days."

Investors fear a Bear Stearns repeat

The fate of Lehman Brothers has been the subject of much market discussion in recent months following the near collapse of Bear Stearns, which was subsequently sold to JPMorgan Chase (JPM, Fortune 500) at a fire sale price.

Analysts have also been busy slashing third-quarter earnings estimates for Lehman, as well as Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500), due to sluggish investment banking activity and weakness in stock markets around the globe.

But Lehman's problems have proven acute than its crosstown rivals. Hit hard by bad investments in the U.S. mortgage market, the investment bank has suffered billions of dollars in writedowns and has been forced to raise billion of dollars in capital.

In June, following the company's first loss, Lehman announced plans to raise $6 billion in capital by selling stock.

At that time, investors were not only questioning the company's accounting but speculating that Lehman may have to sell part or even all of itself to another financial firm.

Speculation about a break-up of Lehman persisted in the months that followed, as analysts bet that the company would shed its profitable Neuberger Berman money management unit to raise cash.

Other large global financial institutions have also been said to be eyeing an investment in the U.S. firm, including Tokyo Mitsubishi Bank as well as a group of investors led by the British bank HSBC (HBC), according to recent news reports.

Lehman chief Fuld has faced increasing pressure to take action amid all the uncertainty about the firm's future. So far this year, there have been a handful of casualties in Lehman's top executive ranks.

In June, CFO Erin Callan and Chief Operating Officer Joseph Gregory were replaced. Callan eventually left Lehman for a job at Credit Suisse while Gregory remained at Lehman in a different position.

First Published: September 10, 2008: 7:59 AM EDT

Commerzbank buys Dresdner Bank for 9.8b euros

Posted: 01 September 2008 0224 hrs

FRANKFURT: German insurance giant Allianz said on Sunday it would sell the nation's third largest private bank, Dresdner Bank, to number two Commerzbank for 9.8 billion euros (14.4 billion dollars) in a major step towards consolidation of the sector.

The cash and share deal included the creation of a trust worth nearly one billion euros to cover risks from risky Dresdner assets, and would leave Allianz with a share of around 30 percent in Commerzbank, a statement said.

It is to take place in two stages and be completed "no later than the end of 2009," pending approval by regulatory authorities, it added.

In the first stage, Commerzbank is to get 60.2 percent of Dresdner in exchange for its own shares which would represent 18.4 percent of its equity, once a capital increase is carried out.

Commerzbank is also to pay Allianz 2.5 billion euros in cash, and transfer its Cominvest fund, which is valued at 700 million euros, to Allianz.

Dresdner would be merged with Commerzbank in the second stage, with the latter acquiring all outstanding shares in exchange for its own stock worth about 3.2 billion euros.

The new German bank would have total assets of around 1.1 trillion euros but still trail far behind number one Deutsche Bank, with 1.99 trillion euros.

Savings of up to five billion euros were expected as a result of the tie-up, which reports have said could see the elimination of some 9,000 jobs.

The deal creates a banking heavyweight better able to compete with Deutsche Bank, but threatens workers especially in Dresdner's troubled investment banking unit.

Allianz, the biggest European insurance group, paid around 24 billion euros for Dresdner seven years ago in a gamble it could make a bigger profit from combined insurance and banking activities.

The state-owned China Development Bank (CDB) had also been considered a front runner, and is said to have offered more money for Dresdner, along with the prospect of fewer job losses.

Political considerations may have scuttled CDB's chances however, since the mood in Germany at present is one of wariness regarding foreign investors, especially when it comes to what are considered strategic interests.

Dresdner's sale to Commerzbank, meanwhile, allows the latter to strengthen its relationships with Germany's successful "Mittlestand" industrial companies.

Allianz will in turn become "the largest shareholder by far and a strong partner of the new bank," the statement said.

Observers said Dresdner's investment banking division, which has suffered successive quarterly losses following the meltdown of the US market for high-risk, or sub-prime, mortgages a year ago, could see heavy job cuts in London and Frankfurt.

The Sunday Times newspaper said more than 1,000 jobs could be cut in the British capital.

Union sources claimed a Commerzbank-Dresdner Bank combination would lead to the loss of up to 9,000 posts.

But the head of Dresdner's works committee, Hans-Georg Binder, told the mass market Bild am Sonntag newspaper that he estimated 4,000 jobs would go, and that some would be at Commerzbank.

The new bank would have 1,200 branches in Germany, 11 million private customers and more than 100,000 corporate and institutional clients, Allianz said.

It was estimated to have staff of around 67,000.

The deal marks a significant step in the unfolding consolidation of Germany's banking sector, although numerous local public savings banks and co-operative banks will still play a leading role. - AFP/de