Mid-January 2008 Merrill Lynch announced a $ 6.6 billion mandatory convertible preference share issue, of which the majority is privately owned with the Kuwait Investment Authority (KIA), the Korean Investment Corporation was established (KIC), and Mizuho Corporate Bank. The case is surrounded by the subprime mortgage crisis that plagued banks set their capital and exhausted. It focuses on the decision of John Thain spending to capital and put it with sovereign wealth funds (SWFs) in an effort to stabilize the companion … Read more »

Mid-January 2008, Merrill Lynch announced a $ 6.6 billion mandatory convertible preference share issue, of which the majority is privately owned by the Kuwait Investment Authority (KIA), the Korean Investment Corporation was established (KIC), and Mizuho Corporate Bank. The case is surrounded by the subprime mortgage crisis that plagued banks set their capital and exhausted. It focuses on the decision of John Thain spending to capital and put it with sovereign wealth funds (SWFs) in an effort to stabilize the company and put them on the path of growth and viability. The case describes the various types and origins of SWFs, their orientation and their recent intensive investment activity in the global financial services sector. The case also discusses the transparency of sovereign wealth funds and their role in the global financial system to provide liquidity in the long term players. Finally, Merrill Lynch’s decision to issue the specific financial instrument to its capital (Mandatory Convertible preferred) and replenish their conditions analyzed.
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from
Giorgos Allayannis,
Rachel Loeffler
Source: Darden School of Business
9 sides.
Release Date: 15, October 2008. Prod #: UV1059-PDF-ENG
The Case of Sovereign Wealth Funds: A New (Old) Force in the Capital Markets HBR case solution