Lehman Said to Weigh Forming New Company to Buy Mortgage Assets
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2008-08-26 — bloomberg.com
Lehman Brothers Holdings Inc. may set up a company funded by outside investors to buy some of its mortgage assets, aiming to dispel concern the firm faces crippling losses, people familiar with the discussions said.
Investors in the new venture would also manage the holdings, which are linked to commercial real estate, the people said, declining to be identified because the proposal hasn't been made public and no decision has been made about how to proceed. The New York-based firm had about $40 billion in commercial-mortgage assets as of May.
Our read: Lehman wants to move its toxic real estate holdings into a minority-owned off-balance-sheet vehicle to offload the troubles. Would be nice, wouldn't it? Except, to do such a deal, they'll probably have to retain the lion's share of the loss exposure, unless they're lucky enough to tap into a shrinking pool of greater fools.
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