We Have Reached A Deal For Lehman, Sources Say
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Derivative traders open session to reduce Lehman risk | Reuters
Posted by John Carney, Sep 14, 2008, 2:43am
We understand that a deal has been reached to divide Lehman Brothers into two entities, with a "bad bank" taking the toxic, real-estate assets amounting to around $85 billion. The deal will be financed without any government backing. Lehman chief executive Dick Fuld will resign.
Bank of America will take the lion's share of the good assets of Lehman, with Barclay's and Nomura playing a role as well. An international consortium of financial firms will inject capital for the deal, preventing Lehman's assets from flooding the market in a fire sale. Many US based firms have not played a large role, in part because they are facing their own financial challenges.
Dick Fuld's resignation was demanded by Bank of America, which played a brinkmanship role in negotiations, threating to let Asian markets open tomorrow without a deal in place, a person familiar with the matter says. Many believe that a Monday market opening without a resolution would effectively have been the end of Lehman Brothers and could have spread financial turbulence to other securities firms. (On a side note: apparently, Japanese markets will be closed Monday morning for a holiday.)
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Derivative traders open session to reduce Lehman risk | Reuters
Posted by John Carney, Sep 14, 2008, 2:43am
We understand that a deal has been reached to divide Lehman Brothers into two entities, with a "bad bank" taking the toxic, real-estate assets amounting to around $85 billion. The deal will be financed without any government backing. Lehman chief executive Dick Fuld will resign.
Bank of America will take the lion's share of the good assets of Lehman, with Barclay's and Nomura playing a role as well. An international consortium of financial firms will inject capital for the deal, preventing Lehman's assets from flooding the market in a fire sale. Many US based firms have not played a large role, in part because they are facing their own financial challenges.
Dick Fuld's resignation was demanded by Bank of America, which played a brinkmanship role in negotiations, threating to let Asian markets open tomorrow without a deal in place, a person familiar with the matter says. Many believe that a Monday market opening without a resolution would effectively have been the end of Lehman Brothers and could have spread financial turbulence to other securities firms. (On a side note: apparently, Japanese markets will be closed Monday morning for a holiday.)
--MORE--