Effect on Lehman Brothers Bonds: Lehman Brothers Bankruptcy

The global investment bank Lehman Brothers, has filed for bankruptcy under Chapter 11, but it said that its bankruptcy plans will not include its broker-dealer operations and other units like Neuberger Berman.

The biggest question that faces the investors of Lehman Brothers is about their stocks and bond holdings. The Lehman Brothers Stock Price is as available from the various exchanges on which the LEH stock is trading and it went down by more than 94% in yesterday's trades. The biog questions that is haunting the investors is What is the status of Lehman Brothers Bonds, i.e. the bonds issued by Lehman Brothers.

The Standard & Poor's or S&P has downgraded the Long term bonds of Lehman Brothers to Default Status. These Lehman’s long-term bonds are still trading and being quoted flat in the secondary market. Some of the market data providers have said that they are unable to collect quotes or other market information for a number of Lehman index-linked bonds and Lehman Brothers Commercial Bank certificates of deposit (CDs).Similarly, no concrete information is available about Lehman index-linked bonds and Lehman Brothers Commercial Bank CDs. God knows what will happen with the long term bonds issued by Lehman Brothers.

There is a lot of interest among other investment firms in buying its broker-dealer operations. Lehman Brothers said that it is in advanced discussions with a number of potential buyers of its investment management division. Lehman Brothers Bankruptcy will represent the end of a 158-year old company that survived world wars and the collapse of Long-Term Capital Management but could not survive the global credit crunch. This is another example like that of the Bear Sterns bank being sold out to J P Morgan for a measely 10 dollars a share, while the bid started at just $2 per share.

As per the news, Investors in recent weeks had grown increasingly jittery about Lehman's $46 billion of mortgages and asset-backed securities, as well as its credit rating and its ability to raise capital. Helpless investors can just wait and watch.

Lehman Brothers Bankruptcy: files for Bankruptcy under Chapter 11

This may come as the biggest setback for most of the financial sector investors. The global investment bank Lehman Brothers, is all set to file for bankruptcy under Chapter 11, but it said that its bankruptcy plans will not include its broker-dealer operations and other units like Neuberger Berman.

There is a lot of interest among other investment firms in buying its broker-dealer operations. Lehman Brothers said that it is in advanced discussions with a number of potential buyers of its investment management division. Lehman Brothers Bankruptcy will represent the end of a 158-year old company that survived world wars and the collapse of Long-Term Capital Management but could not survive the global credit crunch. This is another example like that of the Bear Sterns bank being sold out to J P Morgan for a measely 10 dollars a share, while the bid started at just $2 per share.

As per the CNBC news, Investors in recent weeks had grown increasingly jittery about Lehman's $46 billion of mortgages and asset-backed securities, as well as its credit rating and its ability to raise capital.

Officials at the Federal Reserve and U.S. Treasury are taking steps to mitigate risk to the system and assure the orderly functioning of the U.S. markets when they open Monday. And the Federal Reserve has also agreed to accept lower-quality assets in return for loans from the government. Ten of the Wall Street banks have agreed to set up a collateralized borrowing facility, and committed to fund for $7 billion each - namely Bank of America, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, and UBS.

It is almost certain that Monday will see a gloomy trading day for the US markets, as the US stock markets are set to open with the news of Lehman Brothers Bankruptcy. One Wall Street trader involved in the discussions with officials from the Federal Reserve said every firm had determined their exposure to Lehman by Sunday morning, and were preparing for some Federal assistance in unwinding the trades. However, officials from the Fed said they won't be involved in any such unwind — they told the Wall Street firms to work among themselves to determine how best to settle trades with Lehman. In another setback to Lehman Brothers, the Barclays Bank of UK has decided to pull out from buying Lehman Brothers, almost at the brink of Bankruptcy.