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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (101809)	6/3/2008 3:49:22 AM
From: John Pitera	Respond to of 206093

too much retail politics for my little brain-g- and now lEH needs more capital..... Lehman May Need to Raise Capital as Analysts Foresee First Loss By Ambereen Choudhury June 3 (Bloomberg) -- Lehman Brothers Holdings Inc. may need to raise capital as some analysts estimate the Wall Street firm will report its first quarterly loss since going public in 1994. The fourth-biggest U.S. securities firm probably will post a second-quarter loss of 50 cents to 75 cents a share, according to analysts at Oppenheimer & Co. and Bank of America Corp. New York- based Lehman holds ``very large, illiquid'' assets and ``we can't rule out equity issuance'' to replenish the balance sheet, analysts at Merrill Lynch & Co. said in a report yesterday. Lehman may seek as much as $4 billion by selling common stock, the Wall Street Journal said today, citing unidentified people with knowledge of the matter. The company has raised $6 billion since February amid asset writedowns and losses from the collapse of the U.S. subprime mortgage market. Lehman has dropped 48 percent in New York trading this year, the worst performance on the 11-member Amex Securities Broker/Dealer Index. ``This is adding to the perception that there's a need for more write-offs and capital raisings,'' said Greg Bundy, executive chairman of merger advisory firm InterFinancial Ltd. in Sydney and a former head of Merrill's Australian unit. Lehman fell 8.1 percent yesterday to $33.83 in New York Stock Exchange composite trading. Chief Executive Officer Richard Fuld said in April at the annual shareholders meeting that ``the worst is behind us'' in the credit-market contraction that has cost the world's biggest banks and brokerages more than $250 billion. Credit Rating Downgrade Chief Financial Officer Erin Callan said last month at an industry conference in New York that the firm's so-called leverage ratio declined to 27 percent from almost 32 percent at the end of the first quarter after the capital raisings. The company needs more capital because of declines in the credit markets, David Einhorn, a hedge fund manager who's betting Lehman shares will fall, said in an interview last week. Standard & Poor's downgraded the credit ratings of Lehman and bigger New York-based competitors Morgan Stanley and Merrill yesterday, saying they may disclose more writedowns for devalued assets. Lehman's credit rating was cut to A from A+, as was Merrill's. Investors have ``serious concerns that the subprime crisis isn't over at all,'' said Fumiyuki Nakanishi, an equity strategist at Sumitomo Mitsui Financial Group Inc. in Tokyo. The S&P downgrades may make it harder for the banks to sell derivatives such as credit-default swaps that are tied to bonds or loans, said Brad Hintz, an analyst at Sanford C. Bernstein in New York, who has a ``market perform'' rating on Lehman. ``Lehman needs to reduce its leverage ratios to reflect the new realities of the fixed-income marketplace,'' Hintz wrote in a report to clients today. ``This will not be good for the firm's revenue base.'' To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net Last Updated: June 3, 2008 03:13 EDT