News for 'LEHMQ' - (Morgan Stanley Vends Lehman Claim)
Sep 19, 2009 (Zacks.com via COMTEX) -- Morgan Stanley (MS) sold a claim on $1.2
billion of Lehman Brothers' (LEHMQ) liquidation to about 10 different investors
this week. The claim was connected to approximately 10,000 derivative
transactions for which Lehman was the counterparty. The sales price was 38.5% of
the face value or $462 million. Lehman Brothers Holdings filed for Chapter 11
bankruptcy protection in September 2008. This was the high water mark of the
credit market turmoil. After this big fall, some counterparties suffered huge
losses, which are now looking to claim. Some investors have the capability of
recovering more on the claims than what the original sellers of the claims
expect. As a result, demand for buying and selling those claims has increased
significantly. Furthermore, with signs of recovery, the recent market stability
boosted the trading opportunities in these claims as their value increased over
the last six months. One of the first big blocks of claims was traded by
Deutsche Bank (DB) in June. Deutsche traded more than EUR500 million in the
liquidation of Lehman's European operating company, Lehman Brothers
International Europe. Last month, hedge fund Citadel Investment Group sold a
claim on $423 million of Lehman Brothers' assets to Credit Suisse Group (CS),
according to a filing at New York Bankruptcy Court. Though cyclical headwinds
and market turmoil are expected to persist for a while, we believe that the
management of Morgan Stanley is staying the course to emerge from the downturn
and building a strong competitive position. However, the current backdrop
remains challenging, given the weak housing market and increasing unemployment.
Morgan Stanley's second quarter results experienced continued improvement in
credit default spreads and it was among the first banks to repay the bailout
money. Given the continued momentum in its core institutional securities
franchise and cost containment measures, we expect Morgan Stanley to deliver
strong results in the near future.
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