JPMorgan: Did I forget to mention we’re raising $6 billion?
We’re not suggesting JPMorgan did anything illegal or immoral, but what’s up with the hush-hush capital raise?
Early on Wednesday, the third-largest U.S. commercial bank, and resident Wall Street savior announced a 50 percent drop in first- quarter earnings, dragged down by $4.4 billion of write-downs and loan losses. Chief Executive James Dimon spoke with reporters for a half hour, spent about an hour with analysts and even attended a Korea Investment Forum luncheon, as pictured above.
At no time did the putative Prince of Wall Street mention a little thing like selling $6 BILLION of new hybrid debt to further bolster its so-called “fortress balance sheet.” The sale was quietly completed later on Wednesday.
The bank declined to comment on the transaction, but our sources at JPMorgan said the bond sale was routine, one of more than a hundred such deals over the past decade. Moreover SEC rules prevent banks from disclosing material information in the days ahead of an earnings announcement.
Besides, the source said, bond buyers all over the market knew a deal was in the works and proved to be very hungry for the paper, which was structured so that common shareholders will not see their share of profits diluted. In that case, it’s unlike the costly sales of stock and convertible shares by foundering banks like WaMu or Wachovia.
These days, as the New York Post chuckles, Dimon & Co really can do no wrong…