As expected, Merrill Lynch became the umpteenth financial
institution to take record write-downs linked to the sub-prime mortgage fiasco.
The U.S. investment bank's announced $14.1 billion in adjustments
in the fourth quarter came in near the top of the range of $10 to $15 billion
that analysts had predicted.
Merrill reported a net loss of $9.8 billion or $12.01 per share, the largest
in the company's history. One year earlier the bank had a fourth quarter
profit of $2.3 billion or $2.41 per share.
In the third quarter Merrill had a $2.3 billion loss and took an $8.4 billion
write-down. Subprime related losses for the entire year are in the range of
$23 billion.
On Tuesday, in an attempt to head off some of the repercussions from the quarterly
reporting Merrill announced it had arranged to raise $6.6 billion in cash through
the sale of preferred convertible stock to Middle Eastern and Asian investors
including the Kuwait Investment Authority, Japan's Mizuho Corporate Bank,
and the Korean Investment Corporation.