Goldman Sachs ends second quarter with $22 billion of leveraged loan exposure

By Jennifer Lanning Drey

Portland, Ore., June 17 - Goldman Sachs Group Inc.'s total leveraged loan exposure was $22 billion at the end of the second quarter, representing $8 billion in leveraged loans that were taken on after the end of the third-quarter 2007, David Viniar, Goldman Sachs' chief financial officer, said Tuesday during the bank's second-quarter earnings conference call.

The leveraged loan exposure at the end of the second quarter included $14 billion of leveraged loan exposure remaining out of the $52 billion of leveraged loans that the firm held at the end of the third quarter of 2007, Viniar said.

The firm's leveraged loan exposure has dropped by approximately $3 billion since the May 30 end of the second quarter, according to Viniar.

Purchasers of the leveraged loans have mostly been a mix of distressed asset funds and what Viniar referred to as "real money players," meaning traditionally long-only money players, he said.

$2.09 billion net earnings

For the second quarter, Goldman Sachs reported net revenues of $9.42 billion and net earnings of $2.09 billion.

The firm's investment banking net revenues were down by 2% from the prior-year quarter but were 44% higher than in the first quarter. Net revenues in the firm's underwriting business were 13% lower than the prior-year period, reflecting lower net revenues in debt underwriting, partially offset by higher net revenues in equity underwriting.

Viniar said the decline in debt underwriting was principally due to a decrease in leveraged finance activity, as market conditions remained challenging.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.