JPMorgan Completes Restructuring After Bear Stearns Acquisition
Thursday, September 04, 2008
JPMorgan Chase & Co. (JPM) has completed internal restructuring transactions related to the acquisition of The Bear Stearns Companies LLC (formerly known as The Bear Stearns Companies, Inc.), the $1.8 trillion financial firm said. In late March, JPM bought Bear Stearns for the fire sale price of $10 per share.
JPM has now assumed all of Bear Stearns' outstanding SEC-registered U.S. debt securities and Bear Stearns' obligations relating to trust preferred securities, the investment bank said. As of July 31, 2008, JPM also assumed certain outstanding foreign debt securities of Bear Stearns and its subsidiaries. In addition, JPM guaranteed Bear Stearns obligations under the defunct company's U.S. $30.0 billion Euro Medium Term Note Programme and Bear Stearns' U.S. $4.0 billion Euro Note Issuance Programme.
Jamie Dimon, chairman and CEO of JPM, said his company completed the highly complex Bear Stearns acquisition as planned. “Through the truly remarkable partnership and efforts of our people in extremely difficult times, we made great progress towards full integration, while also significantly reducing our combined risk positions,” Dimon said. “We now have an expanded platform to better serve our institutional clients - one which we fully expect will make our franchise stronger over time.”
The Bear Stearns deal puts JPM at the top of the prime brokerage business. JPM has said its business has been hit hard by the negative effects of the housing contraction, and as DSNews.com reported earlier this month, the investment bank anticipates $1.5 billion in write-offs of mortgage-backed securities for the third quarter. But according to some investment experts, when the financial markets eventually rebound, institutions like JPM could begin to reap the overdue benefits of their mortgage brokering initiatives. As of June 30, the New York-based bank had $19.5 billion in exposure to prime and Alt-A mortgages, and $1.9 billion in exposure to subprime mortgages.
JPM has now assumed all of Bear Stearns' outstanding SEC-registered U.S. debt securities and Bear Stearns' obligations relating to trust preferred securities, the investment bank said. As of July 31, 2008, JPM also assumed certain outstanding foreign debt securities of Bear Stearns and its subsidiaries. In addition, JPM guaranteed Bear Stearns obligations under the defunct company's U.S. $30.0 billion Euro Medium Term Note Programme and Bear Stearns' U.S. $4.0 billion Euro Note Issuance Programme.
Jamie Dimon, chairman and CEO of JPM, said his company completed the highly complex Bear Stearns acquisition as planned. “Through the truly remarkable partnership and efforts of our people in extremely difficult times, we made great progress towards full integration, while also significantly reducing our combined risk positions,” Dimon said. “We now have an expanded platform to better serve our institutional clients - one which we fully expect will make our franchise stronger over time.”
The Bear Stearns deal puts JPM at the top of the prime brokerage business. JPM has said its business has been hit hard by the negative effects of the housing contraction, and as DSNews.com reported earlier this month, the investment bank anticipates $1.5 billion in write-offs of mortgage-backed securities for the third quarter. But according to some investment experts, when the financial markets eventually rebound, institutions like JPM could begin to reap the overdue benefits of their mortgage brokering initiatives. As of June 30, the New York-based bank had $19.5 billion in exposure to prime and Alt-A mortgages, and $1.9 billion in exposure to subprime mortgages.
