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To: Sidney Reilly who wrote (4608)	8/15/2002 12:24:21 PM
From: Jim Willie CB	Read Replies (6) \| Respond to of 89467

S&P may cut counterparty rating on 4 U.S. banks (Press release provided by Standard & Poor's) NEW YORK, Aug 15 - Standard & Poor's Ratings Services said today that it placed its double-'A'-minus/'A-1'-plus counterparty credit ratings on Merrill Lynch & Co. Inc. (Merrill Lynch), Morgan Stanley, and J.P. Morgan Chase & Co. on CreditWatch with negative implications. If lowered, the long- and short-term ratings are not likely to be lowered by more than one notch. In addition, the 'A-1'-plus short-term counterparty credit rating for Goldman Sachs Group Inc. (Goldman) is placed on CreditWatch with negative implications, while its single-'A'-plus long-term counterparty credit rating is affirmed. If lowered, Goldman's short-term rating would not fall below 'A-1'. Notwithstanding Goldman's strong liquidity, continued weak environmental factors and a poor outlook for near-term performance pressure its short-term rating. The outlook on Lehman Brothers Holdings Inc. (Lehman) is revised to negative from stable, and its single-'A'/'A-1' counterparty credit ratings are affirmed. "The actions are based on the deteriorating environment for the profitability of the investment banking industry," said credit analyst Tom Foley. "Although all of these firms have been profitable during the first half of this year, and should remain so, Standard & Poor's anticipates that they will be operating under conditions of sustained revenue pressure and environmental risk." Standard & Poor's will review the strategies of these firms for coping with the current market environment.