Lehman said to be close to raising $5B in capital
Lehman Brothers Holdings Inc. is close to raising more than $5 billion of capital from a group of primarily U.S. investors, The Wall Street Journal reported Sunday.
The investors include the New Jersey Division of Investment, the Journal reported, citing an unnamed person familiar with the matter. This person also said Lehman (LEH, Fortune 500), the nation’s fourth-largest investment bank, is set to report a fiscal second-quarter loss of more than $2 billion. Until recently, reports pegged the loss somewhere between $300 million and $700 million.
The firm was completing final details of the capital infusion Sunday, and the investment, primarily through issuing common shares, could be announced Monday or Tuesday, the Journal reported.
The Associated Press left messages Sunday evening seeking comment from Lehman representatives and a spokesman for the New Jersey Treasury Department.
Lehman shares have fallen more than 50% this year but recovered slightly last week on reports the company may raise capital from an outside investor and allay market fears of a liquidity crisis free credit report.com. Investors regained confidence in Lehman after Standard & Poor’s maintained its rating on the firm, and Merrill Lynch gave it a "buy" rating.
The Financial Times reported Wednesday that Lehman would report it lost between $500 million to $700 million on certain hedging positions during the second quarter. A person familiar with the company’s earnings confirmed those figures to the AP on Wednesday. The person was not authorized to discuss the matter publicly and asked not to be identified.
Other analysts had been predicting a loss of about $300 million.
A Lehman spokesman had declined to comment Wednesday, saying the firm is in a "quiet period" ahead of its earnings, which are expected to be released the week of June 16.