DBRS Confirms Lehman Brothers Long-Term Debt at A (high), Revises Trend to Positive
Non-Bank Financial InstitutionsDominion Bond Rating Service (DBRS) has today changed the trend on all long-term ratings of Lehman Brothers Holdings Inc. (Lehman or the Company) and related entities to Positive from Stable. At the same time, DBRS has confirmed all ratings. The revision of the trend reflects the Company’s success in strengthening its franchise and enhancing its earnings power, while preserving its strong financial profile.
DBRS notes that the change in rating trend to Positive reflects Lehman’s powerful fixed income franchise and its ongoing successful international expansion, as well as the Company’s advances across its equity capital markets, investment banking and investment management businesses. The Company’s superior revenue growth demonstrates the success of its strong, diversified franchise. DBRS believes the Company’s strong and sustainable earnings performance also reflects the consistent disciplined management of expenses and risk during a period of rapid expansion. Sound liquidity and a strong financial profile also underpin the ratings. Despite its strengthened competitive position, the Company still faces larger, well-established competitors in many business lines as it seeks to sustain its growth, especially in international markets. Preserving the Company’s culture and discipline is likely to become more challenging, as its ongoing geographic and business line expansion adds scale and complexity to its operations.
With total assets of $475 billion, New York City based Lehman Brothers Holdings Inc. is the parent company of Lehman Brothers Inc., its lead subsidiary, an institutional investment banking and securities trading firm.
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All figures are in U.S. dollars unless otherwise noted.
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