LBO exposure may hit Bear Stearns, Lehman

(Reuters) - Large commercial banks such as Citigroup Inc. are on the hook for loads of leveraged buyout debt they hoped to sell to investors, but with a $230 billion market capitalization, Citi is seen as having the balance sheet to absorb any losses without much of a headache.




Large commercial banks like Citi and JPMorgan Chase & Co. also benefit from more diversified businesses including revenue from consumer banking and broad international operations.


Read more at Reuters.com Business News

Lehman Strategist Bennett Says Corporate Bond Risk `Only For The Brave'

(Bloomberg) -- Ben Bennett, a credit strategist at
Lehman Brothers Holdings Inc. in London, comments on today's
increase in corporate bond risk.

Contracts on 10 million euros ($13.8 million) of debt
included in the iTraxx Crossover Series 7 Index of 50 European
companies increased by 28,000 euros to 474,000 euros, according
to JPMorgan Chase & Co. Earlier the index rose as high as
504,000 euros.


Read more at Bloomberg Bonds News

Asian Currencies Weaken as Risk Aversion Rises; South Korean Won Advances

(Bloomberg) -- Asian currencies fell, led by the
Indonesian rupiah and Philippine peso, on speculation overseas
investors are cutting back riskier assets on concern the U.S.
economy will slow.

A slump in U.S. subprime loans gives ``serious reasons to
worry'' and is a ``reality check,'' without posing a systemic
threat, Moody's Investors Service said today. A weighted basket
of 10 Asian currencies, compiled by JPMorgan, slipped from the
highest since the region's financial crisis in 1997.


Read more at Bloomberg Currencies News

Corporate Bond Risk Rises for a Second Day, Worries About Subprime Mount

(Bloomberg) -- The risk of owning U.S. and European
corporate bonds rose as investors speculated losses from
subprime mortgage securities will accelerate, according to
traders of credit-default swaps.

Contracts based on $10 million in the CDX North America
Investment-Grade Index of 125 companies rose $4,000 to an
offered price of $48,250 at 3:51 p.m. in New York, Deutsche Bank
AG prices show. The iTraxx Crossover Index of 50 European
companies jumped 20,500 euros ($28,252) to 288,000 euros at 5:30
p.m. in London, according to JPMorgan Chase & Co. An increase in
the indexes suggests deterioration in the perception of credit
quality.


Read more at Bloomberg Bonds News

Corporate Bond Risk Jumps in Europe, U.S. Following Subprime Index Rout

(Bloomberg) -- The risk of owning U.S. and European
corporate bonds rose today after indexes of securities linked to
U.S. subprime mortgages slumped to a record low, according to
traders of credit-default swaps.

Contracts based on 10 million euros ($13 million) of debt
included in the iTraxx Crossover Index of 50 European companies
jumped 20,500 euros to 288,000 euros at 5:15 p.m. in London,
according to JPMorgan Chase & Co. The CDX North America
Investment-Grade Index of 125 companies rose $2,000 to an offered
price of $46,000 at 11:40 a.m. in New York, Deutsche Bank AG
prices show. An increase in the indexes suggests deterioration in
the perception of credit quality.


Read more at Bloomberg Bonds News

Corporate Bond Risk Rises in Europe, U.S. After Subprime Index Selloff

(Bloomberg) -- The risk of owning U.S. and European
corporate bonds rose today after indexes of securities linked to
U.S. subprime mortgages slumped to a record low, according to
traders of credit-default swaps.

Contracts based on 10 million euros ($13 million) of debt
included in the iTraxx Crossover Index of 50 European companies
jumped 18,500 euros to 286,000 euros at 1:52 p.m. in London,
according to JPMorgan Chase & Co. The CDX North America
Investment-Grade Index of 125 companies rose $1,750 to an offered
price of $45,750 at 8:50 a.m. in New York, Deutsche Bank AG
prices show. An increase in the indexes suggests deterioration in
the perception of credit quality.


Read more at Bloomberg Bonds News

Emerging-Market Bonds Decline as Demand for Risky, High-Yield Assets Wanes

(Bloomberg) -- Emerging-market bonds tumbled, led by
declines in Ecuadorean and Argentine securities, as concern about
losses related to subprime mortgages in the U.S. prompted some
investors to pare holdings of riskier assets.

The average spread, or extra yield, on emerging-market bonds
over U.S. Treasuries widened 6 basis points, or 0.06 percentage
point, to 1.74 percentage points, according to JPMorgan Chase &
Co.'s EMBI Plus index. Today's spread is the widest since March
21.


Read more at Bloomberg Bonds News

Bear Stearns May Take on $3.2 Billion of Hedge Fund Loans, People Say

(Bloomberg) -- Bear Stearns Cos. may take over about
$3.2 billion of loans that banks and securities firms made to one
of its money-losing hedge funds to prevent creditors from seizing
more assets, according to people with knowledge of the plan.

Bear Stearns, the biggest broker to hedge funds, offered to
assume the loans after Merrill Lynch & Co. took assets that
backed $850 million in credit lines, said the people, who
declined to be named because the proposal is confidential. Lehman
Brothers Holdings Inc. and JPMorgan Chase & Co. also put some of
their collateral up for sale.


Read more at Bloomberg Bonds News

U.S. Stock Futures Fall on Rising Oil, Mortgage Concern; Citigroup Slips

(Bloomberg) -- U.S. stock-index futures fell after
oil approached $70 a barrel and concern spread that losses in
mortgage securities will reduce profits at financial firms.

Citigroup Inc., American International Group Inc. and
JPMorgan Chase & Co. declined in Europe. Home Depot Inc., the
largest home-improvement chain, and Nokia Oyj, the biggest
mobile-phone maker, slipped after analysts cut their
recommendations on the shares.


Read more at Bloomberg Stocks News

U.S. Stocks Plunge on Higher Yields, Mortgage Bond Concern; JPMorgan Falls

(Bloomberg) -- Financial shares tripped over higher
bond yields, sending the Standard & Poor's 500 Index to its
steepest drop in two weeks.

Growing concern losses in mortgage securities will spread
helped drive down shares of JPMorgan Chase & Co., Citigroup Inc.
and Bank of America Corp. Moody's Corp., the inventor of credit
ratings, fell to its lowest in two months on speculation bond
issuance will slow.


Read more at Bloomberg Stocks News

U.S. Stocks Drop After Bond Yields Gain, Oil Falls; JPMorgan Shares Slip

(Bloomberg) -- U.S. stocks retreated after bond
yields rose for the first time in four days and a plunge in the
price of crude oil dragged down shares of energy producers.

JPMorgan Chase & Co., Citigroup Inc. and Bank of America
Corp. led declines in firms that benefit from low interest rates.
All 32 energy companies in the Standard & Poor's 500 Index
retreated after the price of oil slid from a nine-month high.


Read more at Bloomberg Stocks News

British Airways, Clariant, Weather: European Credit-Default Swap Movers

(Bloomberg) -- The risk of owning European
corporate bonds fell, according to traders in the credit-default
swaps market.

Contracts based on 10 million euros ($13 million) of debt
included in the iTraxx Crossover Series 7 Index fell 1,000 euros
to 195,000 euros at 11:05 a.m. in London, according to JPMorgan
Chase & Co.


Read more at Bloomberg Bonds News

JPMorgan Tells Greek Inquiry It Was Misled by Own Banker On Sale of Bonds

(Bloomberg) -- JPMorgan Chase & Co. told a Greek
parliamentary inquiry it was misled by one of its employees over
the sale of 280 million euros ($374 million) of government bonds
bought by pension funds at inflated prices.

Mike Savvides, a JPMorgan banker, was part of the ``core
deal team'' responsible for underwriting the Greek 12-year bonds.
He has been dismissed because of a ``failure to promptly share
his knowledge of aspects'' of the sale, Jakob Stott, JPMorgan's
chief operating officer for Europe, Middle East and Africa, told
the Greek parliament's standing committee on economic affairs in
Athens today.


Read more at Bloomberg Bonds News

Corporate Bond Risk Jumps to Two-Month High in Europe, Default Swaps Show

(Bloomberg) -- The risk of owning European corporate
bonds jumped to the highest in two months on concern higher
interest rates will boost company borrowing costs, according to
traders of credit-default swaps.

Contracts based on 10 million euros ($13 million) of debt
included in the iTraxx Crossover Series 7 Index of 50 European
companies surged 11,500 euros to 217,000 euros, according to
JPMorgan Chase & Co. Contracts on the CDX North American
Crossover Index jumped $7,000 to $154,000 at the close of trading
in New York yesterday.


Read more at Bloomberg Bonds News

Dollar steadies from 2-day slide, ECB hike eyed

(Reuters) - "Some may think that the credit tightening phase is over if the word accommodative disappears from the statement, but I do not think that would be the case," said Toru Sasaki, chief forex strategist at JPMorgan Chase in Tokyo.




Sasaki noted that the Federal Reserve dropped the word "accommodative" from its statement in December 2005 but went on to raise rates by another percentage point before finally stopping at 5.25 percent last year.


Read more at Reuters.com Hot Stocks News

Treasuries Rise as High Yields, Declines in China's Stocks Attract Bids

(Bloomberg) -- Treasuries gained as investors were
attracted by interest rates near their high for the year and the
safety of government debt after China's benchmark stock index
fell 7.7 percent and as U.S. equity futures declined.

The benchmark 10-year Treasury yield reached a nine-month
high June 1 of 4.96 percent. U.S. stock futures for companies
including Boeing Co., the world's second-biggest maker of
commercial aircraft, and JPMorgan Chase & Co., the third-largest
U.S. bank, declined.


Read more at Bloomberg Bonds News

European Stocks Drop, Led by Deutsche Bank, BNP Paribas on Downgrade

(Bloomberg) -- European stocks dropped on speculation
gains that have sent the Dow Stoxx 600 Index to within 7 points
of a record don't reflect the outlook for earnings growth.

Deutsche Bank AG and BNP Paribas SA paced the decline after
JPMorgan, Chase & Co. cut its recommendation on the investment
banking industry.


Read more at Bloomberg Stocks News

Sabic Agrees $9 Billion Borrowing With Four Banks to Pay For GE Plastics

(Bloomberg) -- Saudi Basic Industries Corp., the
world's biggest chemical maker by market value, agreed on a $9
billion borrowing plan with a group of four lenders to help fund
its acquisition of General Electric Co.'s plastics unit.

Citigroup Inc., HSBC Holdings Plc, ABN Amro Holding NV and
GE Capital will underwrite Saudi Basic's loans and bonds, Mutlaq
al-Morished, the Riyadh-based company's chief financial officer,
said in a phone interview today. JPMorgan Chase & Co. may also
join the group, he said.


Read more at Bloomberg Bonds News

JPMorgan quietly climbs subprime ladder

(Reuters) - "We don't do much in the subprime business -- at all," JPMorgan Chief Executive Jamie Dimon told investors earlier this month at the company's annual meeting. "It will be a good business, by the way."




Indeed, the No. 3 U.S. bank, along with other Wall Street companies, has stepped into a void triggered by a meltdown in the market for lending money to homebuyers with weak credit.


Read more at Reuters.com Bonds News

Yen May Weaken in June as Workers Invest Bonuses Overseas, JPMorgan Says

(Bloomberg) -- The yen may fall as Japanese employees
invest their June bonuses overseas, said Tohru Sasaki, chief
currency strategist at JPMorgan Chase & Co. in Tokyo.

Japanese companies including Toyota Motor Corp., the world's
largest automaker, will probably pay about 13 trillion yen
($106.9 billion) of bonuses to their workers next month, Sasaki
estimated. The yen is the worst performer this quarter among 71
of the world's currencies, dropping 3.1 percent.


Read more at Bloomberg Currencies News