Who knew that Merrill was still trying to unload billions of bad mortgage loans? We thought they got that out of the way last quarter. In any event, the new efforts appear to have hit a snag: Talks with Korea Asset Management have apparently soured over a disagreement over price. Bloomberg:
“We have yet to reach an agreement because of differences in assessing the value of assets,” Lee Chol Hwi 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 Koreans could be asking for a pretty serious discount given the fact that MER CEO John Thain was willing to sell CDOs to Lone Star for 22 cents on the dollar. Either way, time is working in Korea’s favour.
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