Lehman may raise $3-4 billion fresh capital
Lehman Brothers Holdings Inc may raise billions of dollars of fresh capital, suggesting the investment bank will post its first quarterly loss since going public, the Wall Street Journal said on Tuesday, citing sources familiar with the matter.
Analysts and Wall Street executives estimate it might total $3 billion to $4 billion, the newspaper said.
Lehman may issue common stock, diluting current shareholdings, and will probably reveal its capital plans when it reports quarterly results the week of June 16, the WSJ said.
Lehman’s market value is about $18.7 billion, based on Monday’s closing stock price of $33.83, Reuters data shows.
The report sparked selling in the U.S. dollar and weighed on Asian stocks, while boosting demand for safe-haven government bonds such as U.S payday loan. Treasuries.
“The developments are a reminder to markets that the effects of the credit crisis continue to reverberate around markets,” said Zurich-based UBS currency strategist Geoffrey Yu in a note to clients.
According to recent analysts research notes, Lehman has been hurt by hedges used to offset losses in various securities.
Second-quarter losses from asset writedowns and ineffective hedges are likely to top $2 billion, the newspaper said. The bank will also realize losses tied to job cuts, the WSJ said, citing a person familiar with the matter.