Yikes! Even Takefuji is not spared the Subprime Virus
Although the possibility existed, I never quite imagined that Takefuji, a Japanese subprime lender, was exposed to the 'Subprime Virus'. Well, it looks Takefuji will take a big loss on some structured finance transactions it entered into during the middle of last year. Bloomberg reports:
I recall reading an article--I think it was in The Economist--wondering whether Japanese banks were spared the subprime problems. A few of the big Japanese banks wrote down some minor losses but it seemed like only American and European banks were taking big subprime-related losses. Well, the Takefuji news is bound to raise questions about the Japanese banks.
Takefuji Corp. fell in Tokyo trading after the consumer lender said it may cut its full-year earnings forecast from 43.3 billion yen ($420 million) because of losses related to the U.S. subprime mortgage market...
Japan's third-largest consumer lender by market value may post a loss as large as 30 billion yen on subprime-linked derivatives transactions arranged by Merrill Lynch & Co., it said in a statement filed to the Tokyo exchange.
Takefuji removed from its balance sheet 30 billion yen of 20-year bonds carrying a coupon rate of 4 percent, through transactions last May set up by Merrill Lynch Japan Securities Co.
I recall reading an article--I think it was in The Economist--wondering whether Japanese banks were spared the subprime problems. A few of the big Japanese banks wrote down some minor losses but it seemed like only American and European banks were taking big subprime-related losses. Well, the Takefuji news is bound to raise questions about the Japanese banks.
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