LBO Debt May Be Written Down 10%: Merrill Lynch (MER) And Goldman Sachs (GS) At Risk

Bank of America has release a study showing the levels of LBO write-downs that large banks and brokerages may have to take. The figures are based on a "the current series of the U.S. leveraged loan derivative index, LCDX, has fallen to 91.15 cents on the dollar on Monday," according to Reuters. Based on this calculation, the numbers stretch well into the billions of dollars

Firm                                 LBO Exposue              Potential Write-Off

Citigroup (C)                     $43 billion                    $4.3 billion

Goldman Sachs (GS)        $36 billion                    $3.6 billion

JP Morgan (JPM)              $26.4 billion                 $2.6 billion

Morgan Stanly (MS)          $20 billion                    $2 billion

Merrill Lynch (MER)          $19 billion                    $1.9 billion

Data from Reuters

Douglas A. McIntyre