Merrill Lynch has reached agreements to issue $6.6 billion of mandatory convertible preferred stock in private placements to long-term investors, primarily from Korean Investment Corporation, Kuwait Investment Authority, and Mizuho Corporate Bank.
“One of my main priorities over the last several weeks has been to ensure Merrill Lynch’s balance sheet is strong, and these transactions make certain that Merrill Lynch is well capitalized. In addition, the benefits of Merrill Lynch’s collaboration with these high-quality, long-term investors are significant. Through their global reach and diverse client relationships, we are looking forward to more strategic opportunities around the world,” says John A. Thain, chairman and CEO, Merrill Lynch.
“Kuwait Investment Authority is one of the oldest and most successful sovereign investors in the world, and we are very pleased to be partnering with them. The Middle East is one of the world’s fastest growing regions, and we look forward to our relationship with Kuwait Investment Authority providing Merrill Lynch with additional opportunities to grow its presence there.
“Merrill Lynch has a long-standing relationship with Mizuho Corporate Bank and this investment provides us with significant strategic advantages. Because of their extensive corporate client base in Japan and their deep network in China, the Pacific Rim and globally, we expect future collaboration with Mizuho to be very productive,” adds Thain.
Merrill said other investors who had agreed to support the $6.6 billion dollar fund-raising drive included TPG-Axon Capital, The New Jersey Division of Investment, The Olayan Group and T. Rowe Price Associates Inc.
The bank stressed that none of the investors will have any rights of control or role in the governance of Merrill Lynch.
Merrill Lynch plans to announce fourth-quarter and full-year 2007 results on 17 January 2008.