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WASHINGTON, US - US investment bank JPMorgan Chase quietly raised US$5.88 billion (S$8 billion) on Wednesday, the same day it published first-quarter earnings, according to a filing with the US market regulator.
The capital infusion was neither mentioned in the bank's earnings statement nor discussed by executives in its ensuing conference call.
According to the document filed with the Securities and Exchange Commission (SEC), JPMorgan Chase issued preferred stock, which enjoys priority over common stock in the distribution of dividends and other assets.
The shares are to pay a fixed dividend of 7.9 per cent for 10 years, after which the rate floats.
JPMorgan Chase until now had been one of the rare major US banks to have sought new cash amid an ongoing global credit squeeze that stemmed in August from the US sub-prime, or high-risk, mortgage crisis.
In the conference call that followed the earnings report on Wednesday, chief financial officer Mike Cavanagh offered reassurance about the bank's cash cushion.
'Along with the strength of the liquidity of the place, and the US$12.6 billion in overall credit reserves, we feel like the balance sheet and capital position is all in good shape, and proud of how we have managed through the difficult couple of quarters we had in a row and maintained strength there,' he said.
JPMorgan Chase reported on Wednesday first-quarter earnings of US$2.4 billion, half that of a year ago, and an 11 percent decline in revenue.
The bank agreed to buy troubled investment bank Bear Stearns early in March in a government-funded bailout that saved Bear from bankruptcy.
JPMorgan Chase hiked its offer for Bear Stearns on March 24 to US$10 per share, or over US$1 billion, quintupling a fire-sale price agreed a week earlier for the distressed investment bank.
The US Federal Reserve has pledged US$29 billion of taxpayer money to finance the deal in return for US$30 billion' worth of Bear Stearns assets, including ailing mortgage-backed securities. -- AFP
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