Tags: Jefferies | Meaningful | Exposure | Europe

Jefferies Denies Any 'Meaningful Exposure' to Europe

Thursday, 03 Nov 2011 11:17 AM

U.S. investment bank Jefferies Group Inc., responding to a plunge in its share price, said it had no meaningful net exposure to European sovereign debt, and that it was in fact positioned to profit should credit quality there deteriorate further.

Shares of the company plunged as much as 20 percent to $9.81 Thursday, their lowest since March 2009, triggering a trading pause on the New York Stock Exchange.

The shares bounced back after the company's statement, but were still down 8.6 percent at mid-morning for a decline of 24 percent so far this week.

Jefferies' statement, meant to clarify its sovereign debt positions and interest-income expenses, comes days after broker-dealer MF Global Holdings filed for bankruptcy after big bets on European sovereign debt went wrong.

Jefferies said it had a short position on $178 million of Spanish debt — a position that profits as Spanish debt weakens — and exposure to about $140 million of debt from other European nations, mainly Italy.

Jefferies said its net short exposure of about $38 million was equal to about 1 percent of its net worth, or shareholders equity. Positions in such debt are short-term and are marked to market daily, it added.

Jefferies had shareholders' equity of $3.49 billion, supporting $45.13 billion of assets, as of Aug. 31, according to a regulatory filing.

That means its assets were about 13 times its equity, compared with more than 30 times for MF Global.

© 2017 Thomson/Reuters. All rights reserved.

 
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U.S. investment bank Jefferies Group Inc., responding to a plunge in its share price, said it had no meaningful net exposure to European sovereign debt, and that it was in fact positioned to profit should credit quality there deteriorate further. Shares of the company...
Jefferies,Meaningful,Exposure,Europe
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2011-17-03
Thursday, 03 Nov 2011 11:17 AM
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