First Republic Bank shares slumped on a report that advisers have lined up potential buyers of new stock as part of a rescue plan for the beleaguered lender.
Advisers will try to persuade big US banks who have already bailed First Republic out once to purchase bonds from the San Francisco-based company at above-market rates for a total loss of a few billion dollars, less than the Federal Deposit Insurance Corp. fees associated with any First Republic failure, CNBC reported Wednesday. As part of that plan, the advisers have already lined up possible purchasers for new shares, CNBC said, citing sources it didn’t identify.
First Republic shares slid 12% at 8:24 a.m. in early New York trading. They were down 93% this year through Tuesday.
A representative for First Republic didn’t immediately respond to a request for comment from Bloomberg News.
Last month, First Republic staved off a potential collapse after a group of 11 bigger financial firms agreed to park a combined $30 billion in deposits with the lender. JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. each contributed $5 billion of uninsured deposits each, while other banks deposited smaller amounts as part of a plan devised along with US regulators.
Source: https://finance.yahoo.com/news/first-republic-shares-slip-report-122743521.html
