Lehman Brothers' UK structured investments and mortgage subsidiaries are teetering on the brink this afternoon, following the group's overnight bankruptcy announcement.
A spokesperson in the UK confirmed the group's British trading arm – Lehman Brothers International (Europe) – was placed in administration, to be “unwound as soon as possible”.
Lehman Brothers undertook a major drive in the structured products arena in 2008, launching the latest issue of its Enhanced Return Plan just last month. On Friday, the firm had five products available to investors.
However, a spokesperson says the future of its structured investments business is not yet known.
The position of Lehman Brothers’ UK mortgage brands, Preferred Mortgages, Southern Pacific Mortgages and London Mortgages, is also yet to be determined. Lehman announced back in April the two brands would close to new business, but continue to service existing clients.
Last week Lehman confirmed BlackRock will take on £4bn of the firm's UK mortgage book. A BlackRock spokesperson says it is too soon to know whether Lehman's bankruptcy would affect the deal.
Earlier today the FSA said it was working with market practitioners, including the London Clearing House, to ensure the orderly the winding down of Lehman’s wholesale business.
According to Lehman’s overnight statement, Lehman Brothers Asset Management will continue to conduct business as usual and is not subject to the bankruptcy case of its parent.
0207 484 9793
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress