Merrill announces emergency share sale

29 July 2008

Merrill Lynch is to enforce drastic stock sell-offs in order to improve its credit ratings, the firm has said.

In a statement released yesterday, the US firm indicated that it would sell off $8.5 billion of shares - with Singaporean fund Temasek buying $3.4 billion of this offering.

Additionally, Merrill plans to liquidate over $30 billion of bonds at just 20 per cent of their face value.

The bank, which will write down an additional $4.4 billion of assets in the third quarter of 2008, has been one of the Wall Street firms worst hit by the credit crunch.

Merrill has lost around $10 billion over the past year.

Chief executive John Thain has previously denied rumors that the bank would need to raise new capital due to the adverse market conditions.

"Right now we believe that we are in a very comfortable spot in terms of our capital," he said last week.

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