Report: Merrill to wind down subprime unit
The firm will close down most of First Franklin Financial, its subprime-mortgage lending unit business, according to CNBC.
Merrill Lynch & Co. will close down most of First Franklin Financial Corp., its subprime-mortgage lending unit business, according to CNBC.
The move, which could lead to 400 to 500 job cuts, could start as early as next week, the television report said.
“We don’t comment on market rumors,” Merrill spokesman Bill Halldin said.
Merrill Lynch initially bought First Franklin from Cleveland-based National City Corp. in December 2006 for $1.3 billion prior to the collapse of the housing market.
By mid-September 2007, however, it begun to make job cuts in the unit (InvestmentNews, Sept. 17).
The report comes a little over a month after the company’s chief executive officer, John Thain, announced that Merrill would soon be exiting the business of underwriting collateralized debt obligations and other structured products (InvestmentNews, Jan. 30).
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