The banks that had agreed to finance the $19.5 billion takeover of Clear Channel Communications are now balking. Bain Capital and Thomas H. Lee Partners, the private equity buyers, and Clear Channel may take the banks, including Citigroup, Morgan Stanley, Deutsche Bank, Credit Suisse and Wachovia, to court to force the deal, sources say.
The central banks have tried to inject liquidity into the financial system, but they have not persuaded banks to relax their credit standards. In the U.S., U.K. and eurozone, bank borrowing costs actually rose, despite optimism in the stock markets and the efforts of the Federal Reserve, Bank of England and European Central Bank.
Investment banks, including Morgan Stanley, Credit Suisse, Goldman Sachs and UBS, have seen their revenues from equity capital markets plummet in Asia as fewer companies opt to go public. Bank fees from Asia, not including Japan, have dropped by as much as 70.9% so far this year, according to data from Thomson Financial.
With global markets in turmoil, corporate China is moving gingerly to balance the risk and reward of international investment. The caution was evident in the decision of Citic Securities, one of the largest brokerages in China, to back away from a $1 billion investment deal with Bear Stearns.
JPMorgan Chase executives say Bear Stearns' prime brokerage and trade processing businesses, which employ about 800, will be integrated into JPMorgan's current operations. Bear's clearing business generated net revenue of $1.2 billion in the last fiscal year.