Does Contagion Spread To Jefferies?
Posted on November 3rd, 2011 by MoverMike
The firm says it bears no relation to MF Global (40:1) and it isn’t as leveraged only 12.9:1, yet, Egan Jones has lowered their rating from BBB to BBB- (Neg.)
Beginning in 2008, the firm took advantage of the dislocation created during the credit crisis to enter several new business segments, including mortgage-backed securities and municipal bonds.
Jefferies has most of its assets classified as level 1 or level 2, which is a good thing. Egan Jones’ concerns lies with Jefferies holdings of Soverign debt of $2.7 billion equal to 77% of the firm’s equity.
The chart of JEF doesn’t look too healthy.
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