Business Editors
NEW YORK--(BUSINESS WIRE)--August 2, 2000
Bear, Stearns & Co. Inc., Credit Suisse First Boston, Lehman Brothers, and Salomon Smith Barney announced today that they will launch a new company with a mandate to build the premier electronic trading platform for all types of mortgage and asset-backed securities. The new joint venture will offer an internet-accessible trading system for the mortgage securities market. The goal of the joint venture is to provide a more efficient marketplace for investors, along with significant operating cost savings for the industry.
By providing unsurpassed price transparency and liquidity, the joint venture is expected to offer the most significant enhancement to this marketplace since its expansion in the late 1970's. The four firms, which expect to use the new system for their own trading activity, are among the leaders in asset-backed and mortgage securities, and as such are all major market-makers. By bringing their customers into one marketplace, the current level of liquidity has the potential to grow exponentially.
In a joint statement, the four firms said, "What led us to this effort was a shared belief that we need to make it easier, cheaper, and faster for our institutional customers to trade mortgage and asset-backed securities and a recognition that advances in technology and communications mean that by supporting a single new trading platform, we can achieve a level of liquidity never previously available."
In its first stage of operations, the new company will offer dealer subscribers an electronic network as an alternative to the traditional telephone-based systems through which most inter-dealer trading takes place today. The system will initially handle trades in Ginnie Mae, Fannie Mae and Freddie Mac guaranteed mortgage securities and will be open to any dealer that meets customary industry credit standards.
The network will subsequently be expanded to provide direct access for institutional investors as well as broker-dealers and will broaden its product mix to handle secondary trading in the full range of mortgage and asset-backed securities. The new company will also provide ancillary products and services, including analytic and research data used to value the securities. The firms plan to consult extensively with institutional investors to assure that the new platform meets their requirements.
Founded in 1923, Bear, Stearns & Co. Inc. is a leading worldwide investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately $24.6 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers global clearing services to broker dealers, prime broker clients and other professional traders, including securities lending. Headquartered in New York City, the company has more than 10,500 employees located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, San Francisco and San Juan; and an international presence in Beijing, Buenos Aires, Dublin, Hong Kong, London, Lugano, Sao Paulo, Shanghai, Singapore and Tokyo. For additional information about Bear Stearns, please visit our Web site at http://www.bearstearns.com.
Credit Suisse First Boston is a leading global investment banking firm, providing comprehensive financial advisory, capital raising, sales and trading, and financial products for wholesale users and suppliers of capital around the world. It operates in 57 offices across more than 37 countries and six continents and has over 15,000 staff. Credit Suisse First Boston is one of the world's largest securities firms in terms of financial resources, with approximately $9.8 billion in revenues in 1999 and $7.8 billion in equity and $275 billion in assets as of December 31, 1999. The Firm is a wholly owned subsidiary of the Zurich-based Credit Suisse Group. For more information on Credit Suisse First Boston, please visit our website at http://www.csfb.com.
Lehman Brothers (NYSE:LEH) is a global investment bank with leadership positions in corporate finance, advisory services, private equity, municipal finance and fixed income and equity sales, trading and research. Established in 1850, the Firm is among the largest and strongest investment banks in the world, with total capital of more than $41 billion and assets of more than $234 billion. Lehman Brothers serves the financial needs of corporate, government and institutional clients, and high-net-worth individuals through offices in major financial centers worldwide. Clients, investors, and others can find additional information about Lehman Brothers, or contact the firm directly, at the Lehman Brothers website, at http://www.lehman.com.
Salomon Smith Barney is part of Citigroup's Global Corporate and Investment Bank, which brings together Citibank, the world's most global corporate bank, and Salomon Smith Barney, a leading global investment bank and securities brokerage firm. Together they provide complete financial solutions to corporations, governments, institutions and individuals in 100 countries. Award-winning businesses include corporate and investment banking services, investment advice, financial planning and commercial insurance products.
Citigroup (NYSE:C), the most global financial services company, provides some 100 million consumers, corporations, governments and institutions in 100 countries with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage and asset management. The 1998 merger of Citicorp and Travelers Group brought together such brand names as Citibank, Travelers, Salomon Smith Barney, Commercial Credit (now named CitiFinancial), and Primerica under Citigroup's trademark red umbrella. Additional information may be found at: http://www.Citigroup.com.
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