-Caveat Lector- from: http://www.aci.net/kalliste/ <A HREF="http://www.aci.net/kalliste/">The Home Page of J. Orlin Grabbe</A> ----- Japanese Financial Markets Largest Brokerage Firm Downgraded, Close to Junk Bond Status How long before Merrill Lynch goes the same way? Nomura Securities, Japan's biggest broker, was dealt a double blow yesterday as two big US credit-rating agencies downgraded it. The downgrades reflect concerns over Nomura's capital base and future earnings and growth prospects. Nomura is now close to junk bond status, as Standard and Poor's lowered its long-term rating from A- to BBB, the lowest rank in the investment grade category. S&P also lowered the broker's short-term rating, from A2 to A3, while Moody's reduced Nomura's long-term rating from Baa1 to Baa2 and placed its short-term rating on review. These downgrades reflect the growing problems at Nomura, which most recently include heavy losses at its real estate subsidiary, Nomura Finance. While Nomura has not revealed the extent of the losses, they are believed to total between �250bn and �300bn ($2.1bn and $2.5bn). This comes as an additional blow to the broker, which recorded around $1.3bn of first-half losses in overseas markets such as Russia and the US commercial mortgage-backed securities market. Nomura is appealing to large Japanese banks to extend some �300bn in subordinated loans to help boost its capital base. According to local media reports, the broker is considering applying for a further �100bn. Yesterday, Nomura confirmed the possibility of increasing its request for subordinated loans, but refused to comment on the amount under deliberation. S&P pointed yesterday to "the severely distressed asset quality of Nomura's non-bank affiliate, Nomura Finance; persistently large high-risk exposures in the US; and challenges associated with the implementation of its revised domestic strategy". Junichi Ujiie, president of Nomura, said: "We are disappointed that these announcements come only a matter of weeks before our annual results and fail to reflect the very significant progress Nomura has made in the past six months." Paul Heaton, analyst at Deutsche Bank in Tokyo, said: "Nomura came to rely on its overseas earnings in the 1990s - but with little profits expected [from their overseas operations] in the future, it will have to get to grips with its clients in Japan." But Nomura's downgrade also highlights the severity of the environment surrounding the Japanese securities sector. Nomura's shares were down 5.28 per cent, or �76, to �1,364 yesterday, in a falling stockmarket. The Financial Times, March 25, 1999 Spy vs. Spy Israel Jails Ex-Mossad Agent for 5 Years Inciting war with Syria JERUSALEM (AP) -- A former Mossad spy was sentenced Wednesday to five years in jail for supplying phony information which reportedly brought Israel to the brink of war with Syria. The trial and sentencing of Yehuda Gil, 64, were held behind closed doors in the Tel Aviv District Court. Defense attorney David Libai said he would appeal the conviction and sentence. According to Israeli media reports, Gil told his superiors in 1997 that Syrian President Hafez Assad was planning a military strike to seize part of the Golan Heights captured by Israel in the 1967 Mideast war. The information provoked responses in the Israeli security establishment that led Israel very close to war with Syria. During the trial, prosecutors said the false information had a significant influence on state security and could have led to a loss of lives. Gil retired from the Mossad in 1989 after 19 years of service, but continued to freelance for the agency. The Yediot Ahronot daily quoted him as saying he felt the need to continue to prove himself after his retirement. He could have been sentenced to up to 15 years in prison on the charge of delivering false intelligence, but Libai said the judges took into account Gil's age and his outstanding record of past service. "He was a legend in all that he did. He did remarkable things at the risk of his life," Libai said. "But from the point of view of the accused, the sentence was very harsh." Gil was also convicted of embezzlement for pocketing money the Mossad had given him to buy information from a Syrian source. Associated Press, March 24, 1999 ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End Kris DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! 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