It's a buyer's market: Merrill's trying to sell bad loans to the Koreans but price is a sticking point
They may have to bite harder on the bullet: Merrill Lynch is trying to sell more of their seemingly endless supply of bad loans -- a "significant" amount -- this time to Korea Asset Management Corp., but the bid - ask seems to be an issue and may chill any deal. According to Bloomberg:
<p><p><p>HTML clipboard</p></p></p> <p><p><p>HTML clipboard</p></p></p> ``We have yet to reach an agreement because of differences in assessing the value of assets,'' Lee Chol Hwi [KAM's CEO] said yesterday in an interview in Seoul. ``We have been seeking to buy a significant amount, but a deal may be difficult at this rate.''
Failure to strike a deal may indicate Merrill, the third- largest U.S. securities firm, and Lehman Brothers Holdings Inc. might have to cut prices for assets they're trying to sell as mortgage-related losses widen. Lee, 55, said state-run Korea Asset can afford to be patient because the U.S. financial crisis will probably push prices lower.
``The U.S. companies including Merrill need whatever capital they can get, even at the cost of making deals that may be less favorable to them,'' said Yun Chang Hyun, professor of business administration at University of Seoul. ``Those with money definitely have the upper hand right now.''
Sell Bad Loans to Korea Asset - Bloomberg
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