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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, March 14, 2008

Bear Stearns Reports Financing Arrangement With JPMorgan Chase

The Bear Stearns Companies Inc. announced today it reached an agreement with JPMorgan Chase & Co. (JPMC) to provide a secured loan facility for an initial period of up to 28 days allowing Bear Stearns to access liquidity as needed. Bear Stearns also announced that it is talking with JPMorgan Chase & Co., regarding permanent financing or other alternatives.

Alan Schwartz, president and chief executive officer of The Bear Stearns Companies Inc., said, "Bear Stearns has been the subject of a multitude of market rumors regarding our liquidity. We have tried to confront and dispel these rumors and parse fact from fiction. Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations."

The SEC issued the following statement regarding The Bear Stearns Companies:

The Securities and Exchange Commission has been in close contact with the Department of the Treasury, the Federal Reserve, and the Federal Reserve Bank of New York during discussions concerning an agreement by J.P. Morgan Chase & Co. to provide a secured loan facility to The Bear Stearns Companies. We will continue to work closely together in a way that contributes to orderly and liquid markets.

FINRA issued the following statement about Bear Stearns:

FINRA, in coordination with the Securities and Exchange Commission (SEC) and other regulatory authorities, has been monitoring the U.S. broker-dealer subsidiaries of Bear Stearns & Co. Inc. These broker dealers (Bear, Stearns & Co Inc., Bear, Stearns Securities Corp., Bear Wagner Specialists LLC) remain in compliance with the SEC's and FINRA's capital rules.

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