MF Global executives are fighting for the broker- dealer’s future after its shares fell by more than two-thirds over the week in the wake of downgrades of its credit rating.
A $6.3 billion (€4.44 billion) bet on European sovereign debt and an unexpected second-quarter loss announced on Tuesday spooked the three main rating agencies, who said the debt bet was too big for a company with a small balance sheet and questioned its risk management. Fitch and Moody’s downgraded the company’s debt to “junk”.
Chief executive Jon Corzine hired Evercore to pursue strategic options.
It soon became clear that the only path being pursued was a sale of all or parts of the company. Less clear was who might buy it. – (c) 2011 The Financial Times Limited
