John Thain, CEO of Merrill Lynch & Co.,
said that the company would consider selling its stakes in Bloomberg LLC and BlackRock Inc., but the firm could also make use of the Federal Reserve's discount window, if it needed to raise more capital.
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The investment bank has never before spoke about selling stakes in its
financial news service or money management service, which are both
strong performing assets. Merrill agreed not to sell its stake in
BlackRock until sometime in 2009, but Thain said that it could seek
permission for a sale.
Merrill Lynch raised over $12 billion from a series of
investors, including sovereign wealth funds, earlier this year. Thain said at a Wall Street Journal conference that Merrill had sold down $5 billion of leveraged loans and then made $1 billion more in new loans.
Merrill Lynch has not borrowed money from the
Federal Reserve's discount window, and Thain is pushing for broker-dealer access
to the Federal Reserve discount window to continue, he said at the conference.
"I think it should stay available to the banks and investment banks -- the primary dealers. It's important that it does stay available," according to a report in
The New York Times.
The possibility that Merrill would shed stakes in Bloomberg and BlackRock depicts where banks are in terms of trying to regain their footing. Since the collapse of Bear Stearns Cos., the Fed has been lending money to larger broker-dealers, struggling to regain leverage in the markets, at lower rates, but that offer is due to expire in September.
- Maria Woehr
