Tuesday, December 11, 2007
More fallout from the subprime mess:
Washington Mutual, one of the largest lenders, is leaving the subprime lending business, raising $2.5 billion through an issuance of convertible preferred shares, cutting its dividends and eliminating over 3000 jobs. NYTimes, Washington Mutual Cutting Dividend and Jobs; WSJ, WaMu Is Retrenching After Taking Hard Hit From Mortgage Crisis .
Bank of America has closed its Columbia Strategic Cash Portfolio, the largest of its kind, after wealthy investors withdrew billions of assets. Only last month the fund had $40 billion in assets. Investors will lose 1/2 cent on the dollar. NYtimes, Mortgage Crisis Forces the Closing of a Fund; WSJ, A $34 Billion Cash Fund to Close Up.
MBIA, the largest bond insurer, is receiving a $1 billion investment from private equity firm Pincus Warburg after Moody's warned last wekk that MBIA was at "greater risk" of a capital shortfall than previously thought. NYTimes, Equity Firm Makes $1 Billion Investment in MBIA; WSJ, MBIA Gets a Capital Pain-Reliever.