Is this true?

bayliner1979

Washington Mutual losses a concern

Lender needs capital, analyst contends

BY DAVID MILDENBERG • BLOOMBERG • March 28, 2008

Washington Mutual Inc., the largest U.S. savings and loan, may lose $4.2 billion this year because of mounting losses on home loans, CreditSights Inc. said in a report Thursday.

Washington Mutual may have to raise at least $3 billion in additional capital to retain a cushion above the minimum required by regulators, analyst David Hendler said in the report. While the Seattle-based company has sufficient access to funds in 2008, it faces more challenges in 2009 when $16.6 billion of debt is scheduled to mature, he said.

"As 2008 unfolds we would expect the company to take actions such as raising additional capital, shrinking its balance sheet or selling assets," he said. If WaMu, as the company is nicknamed, decides to put itself up for sale, JPMorgan Chase & Co. and Wells Fargo & Co. are the most likely bidders, Hendler said. JPMorgan is the third-largest U.S. bank by assets, while Wells Fargo is fifth.

Washington Mutual reported its first loss since 1997 in the fourth quarter after writing down the value of its home-mortgage unit by $1.6 billion and setting aside $1.5 billion to cover bad loans. The lender said it will have to put aside $1.8 billion to $2 billion in provisions for the first quarter.

Moody's Investors Service on March 14 cut Washington Mutual's senior unsecured credit rating to one notch above junk status. Moody's said WaMu's 2008 losses could eliminate its "$6-billion capital cushion above regulatory well-capitalized minimums."

Besides capital markets, funding sources include the Federal Home Loan Bank and deposits from the retail banking unit, Washington Mutual spokeswoman Olivia Riley said earlier this month.

The Federal Home Loan Bank Board system had advanced $63.9 billion to Washington Mutual as of Dec. 31, more than any other institution except Citigroup Inc., the largest U.S. bank, Hendler said.

Derek Aney, a spokesman for Washington Mutual, referred questions about the lender's liquidity to a Jan. 29 investor conference at which CEO Kerry Killinger said the company had $29 billion in "available excess liquidity."

New York-based CreditSights advises clients on corporate bonds and credit derivatives issued by more than 600 companies. Hendler was formerly a banking analyst at Credit Suisse.

Washington Mutual is expected to lose $1.09 per share, according to the average estimate of 17 analysts surveyed by Bloomberg.

原帖由 kmyc 于 2008-3-28 17:16 发表 Man you said it!!! WM is actually more likely. FED cannot afford another mega investment bank collapsing. And both LEH and MER have access to the 200 Billion lending stuff, so they cannot be as bad ...