LEHMAN Brothers Holdings Inc may raise up to US$4 billion in fresh capital, suggesting the investment bank will post its first quarterly loss since going public, the Wall Street Journal said yesterday.
New capital may be raised by issuing common shares, diluting existing shareholders, and would probably be announced in conjunction with its quarterly results due the week of June 16, the newspaper said.
Lehman's market value is about US$18.7 billion, based on Monday's closing stock price of US$33.83, Reuters data shows.
The report sparked selling in the United States dollar and weighed on Asian stocks, while boosting demand for safe-haven government bonds such as US Treasuries. "The market is very cautious about developments with troubled financial firms," said Hideaki Inoue, chief manager of forex trading at Mitsubishi UFJTrust Bank in Japan.
According to the newspaper, Lehman was hurt by hedges used to offset losses in real estate and other securities. Second-quarter losses from writedowns on assets and ineffective hedges are likely to top US$2 billion. Several analysts expect the bank to post a loss in the second quarter.
Lehman is the smallest of Wall Street's four major investment banks, following the purchase of Bear Stearns by JPMorgan Chase & Co. Lehman did not return calls for comment.