Merrill Lynch CEO John Thain expressed doubt that the industry-wide bail-out plan for the credit insurers would ever get off the ground but that infusions into individual companies would be more likely.
In other Merrill news, the firm is cutting back on structured finance and CDO’s…..
From the Financial Times:
Mr Thain said an effort by New York state
regulators to help leading bond insurers maintain their credit ratings was
raising interest in the sector on the part of investors including private equity
groups and specialists in distressed companies.However, he said in an interview with the Financial Times on Wednesday that
getting banks to agree on a single approach was unlikely because they have
different exposures to the credit insurers and varying opinions on what should
be done.âI think thatâs very hard to get a transaction put together across the whole
industry. I think itâs more likely youâll have a company by company
solution,â Mr Thain said.
From Bloomberg:
“Opportunities in many areas” of
structured finance and so-called collateralized debt obligations “will be
minimal for the foreseeable future and our activities will be reduced
accordingly,” New York-based Merrill said in an e-mailed statement. The firm
will continue packaging corporate loans and derivatives into securities.Merrill issued the statement after Chief Executive Officer John Thain told
investors at a conference in New York earlier today that the firm planned to
exit its CDO and structured credit businesses. Jessica Oppenheim, a spokeswoman
for the company, said the statement was released to clarify Thain’s remarks. She
declined to elaborate on the statement.“We are not going to be in the CDO and structured-credit types of businesses,”
which generated 15 percent of the firm’s fixed-income revenue, Thain, 52, said
at the conference.
Thain sees new capital infusions for monolines – Financial Times
Merrill Lynch to Cut Back Structured Finance, CDOs – Bloomberg
Tags: Bond Insurers, CDO, John Thain, Merrill Lynch
