Just a Reminder

Erin Callan from Lehman’s conference call in June:

Lowering gross and net leverage to less than 25 times and less than 12.5 times respectively, both of those numbers are prior to today’s capital raise; reducing our gross assets by approximately $130 billion and our net assets by approximately $60 billion with a large part of the reduction, as I will talk about in detail, coming from less liquid asset categories and also providing significant price visibility for marking the remainder of our inventory.
We significantly reduced our exposure to asset classes such as residential and commercial mortgages, and real estate held for sale of approximately 15% to 20% in each case and acquisition and finance exposure by almost 35%. We also reduced our high yield or non-investment grade debt inventory in the aggregate, which includes our funded acquisition finance position by greater than 20% in the quarter.
I want to be clear at this point that we do not intend to lower our leverage ratios from these levels. From a liquidity perspective, we made great progress growing our cash capital surplus to approximately $15 billion, that’s the surplus, from $7 billion in the first quarter. We grew our liquidity pool to almost $45 billion and that compares with $34 billion at the end of the first quarter.

Posted by on September 15th, 2008 at 7:19 am


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