Page last updated at 23:46 GMT, Monday, 9 June 2008 00:46 UK

Lehman losses prompt share sale

Lehman Brothers headquarters in New York
Lehman admits it needs $6bn to boost its balance sheet

US investment bank Lehman Brothers is raising $6bn (3bn) to boost its finances after predicting a loss in the second quarter of 2008.

The firm expects a $2.8bn loss compared with $1.3bn profit a year earlier, due to the US sub-prime mortgage meltdown and the global credit crisis.

Just last week the bank denied it was facing funding problems.

It is the first loss for the Wall Street bank since being spun off from American Express in 1994.

The move comes after Lehman Brothers raised $4bn in April by selling shares to quell investor concerns that it needed more capital.

I am very disappointed in this quarter's results
Richard Fuld
Lehman Brothers chief executive

Share slump

The bank's public offering of common stock and convertible preferred stock will be aimed at mainly US investors, analysts said.

Lehman, which is due to formally announce second quarter earnings on 16 June, has seen its shares slump more than 50% this year on mounting concerns about its exposure to the mortgage market.

On Monday, Lehman shares slid 8.7% to $29.48 in New York.

Chief executive Richard Fuld said: "I am very disappointed in this quarter's results."

Analysts have wondered about Lehman's health after the global credit crunch led to the collapse of smaller rival Bear Stearns, which was bought cheaply by JPMorgan Chase.

"It's not all gloom and doom, but certainly not brilliance from Lehman," said Angus Campbell, head of sales at Capital Spreads.




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