Egan Jones With Latest Jefferies Shocker: "Unsustainable... 77 Cent Recovery On Senior Debt... We Will Cut Without A Major Deleveraging"

Tyler Durden's picture

And here is Egan-Jones again:

Synopsis: Unsustainable, in our opinion - JEF needs to raise equity (i.e., $1B) AND deleverage to reduce its 9.5+% LT yield. JEF's total debt to capital is 90.4% vs. 67% for IBKR, 62% for RJR and 43% for GFIG. GS and MS have ratios near 88% but they are significantly larger and should have some federal support via their banking charters. Furthermore, MF's freezing and shortchanging client funds have increased scrutiny of other medium-sized brokers. Raising $1B in new equity and reducing assets by $5B would reduce total debt to capital to only 86%. Email us for a more granular liq. analysis showing a 77% recovery for the sen. debt. Watch the recent rise in int. exp. relating to an acq. and the cost and avail. of funding. We will cut without a major deleveraging.

Full note

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redpill's picture

Jefferies is fine

/Cramer

slaughterer's picture

Egan-Jones and ZH really have a hard on for JEF.  

a growing concern's picture

Something something smoke something something fire.

Mr Lennon Hendrix's picture

Luckily for me silver doesn't burn.

redpill's picture

Luckily Groupon Stock Certificates do, because at this rate all they will be good for is kindling soon.

cbaba's picture

They are the underwriters for MF Global Bonds and they are liable for various law suits now.

Of course they will be under scrunity.

Then there will be the next, and next and next....until all the dominoes fall.

Remember if there is one cockroach in the kitchen, there will always be some others that you don't see them yet.

sitenine's picture

Cockroaches indeed. Corzine hasn't been questioned, and will likely be hired by GS or the like in short order. Justice is blind... Yeah, real blind. Just read this yahoo story, and nearly puked on my keyboard - http://finance.yahoo.com/blogs/daily-ticker/return-debtors-prisons-colle...

mrgneiss's picture

Someone should do some heavy editing on his Wiki bio to help portray the real incompetent and criminal that he is.

http://en.wikipedia.org/wiki/Jon_Corzine#Post-gubernatorial_career

It is interesting reading his bio, his ex-wife said he let his family down and would let down the people of New Jersey as well, how prescient of her!

He was injured in an accident once, not wearing a seatbelt, way over the speed limit, with a state trooper driving him..................didn't requalify for certain FINRA licenses............obviously someone who felt the laws for the little people didn't apply to him..........when reading of these incidents in his bio no one should be surprised by the looting of the customer accounts at MF Global by this kind of narcissistic sociopath...........

smlbizman's picture

fuckin o.j. knows corzines guilty....

redpill's picture

The Tylers have a good nose for smelling bullshit, which is all Jefferies has been talking since MF Global went tits up.

slaughterer's picture

Cue Dick Bove:

(out on Fox just one minute ago):

Rochdale Securities analyst Dick Bove told FOX Business that Jefferies is an "acquisition target" and the most likely acquirers are capital rich Canadian banks, which include Royal Bank of Canada and TD Bank Group. 

Read more: http://www.foxbusiness.com/industries/2011/11/22/exclusive-jefferies-ceo-weighing-future-as-independent-firm/#ixzz1eSVizxX8

ItsDanger's picture

Someone tell the 2 dicks, thats not happening.  Canadian banks are more interested in regional bank acquisitions.

earnyermoney's picture

Tricky Dick starting a rumor to ramp the stock. Must have a rather large sack of JEF turds over his shoulder.

GeneMarchbanks's picture

Should of went for that discount window but Nooo you wanted to be The Last True Investment Bank didn't ya?

WestVillageIdiot's picture

By the way, when will Goldman be opening up a bank branch near me?  I thought there were rules for banks about making sure they have enough locations to serve the public.  Surely, Goldman must have branches all around the country, if they are a bank.  I am walking distance to their headquarters.  Do they have ATMs in there?  Do they offer personal checking with BillPay? 

GeneMarchbanks's picture

Funny you ask. The Squid doesn't so much have 'branches' as full service tentacles. Also, they have ATMs but it stands for something else and you absolutely must be a customer.

MachoMan's picture

I'm pretty sure they hand out ATMs to most people, not just clients proper...

jcaz's picture

LOL-  Dick, Dick, Dick.....   Find out where Corzine is hiding, go join him while you can......

Beam Me Up Scotty's picture

That sounds an aweful lot like Tick, Tick, Tick.......

Buck Johnson's picture

I knew Jeffries was BS everybody.  They are the next one to go and it will be nasty.

c'mon man's picture

12 page letter from Jefferies in 3...2...1....

GeneMarchbanks's picture

Yadda Yadda IMF Yadda Italian bonds

We'll be fine.

fonestar's picture

Or another 2 page pdf a la MF'ing Global "highest ethical standards" type crap!

Smithovsky's picture

I'd like to hear Whitney's opinion on this before I do anything.  

Mark123's picture

Funniest comment this morning!

WestVillageIdiot's picture

I think he meant Whitney Houston. 

tekhneek's picture

"Jefferies is undervalued compared to its assets. I'm a buyer."

1a2b3c4d's picture

Whitney Houston? What the hell would she know about this?

Carlyle Groupie's picture

"We will cut without a major Deleveraging".

Newest EJ consultant: David Copperfield

economessed's picture

Then what did they look like 2 months ago before they "fixed everything"? -- YIKES!!!! 

Vagabond's picture

But the Dick Handler said everything was okay ???

slaughterer's picture

I think his name is Rich Handler.   

MsCreant's picture

And that is better? Seriously? Look at what you wrote. 

MsCreant's picture

If I had significant wealth, I would not go to someone named "Rich Handler." I do not desire to be "Handled."

a growing concern's picture

The only other person with a worse name is racecar driver Dick Trickle.  Seriously???

WestVillageIdiot's picture

The Detroit Lions used to have a player by the name of Harry Colon.  I always thought that was an unfortunate name. 

Tsar Pointless's picture

When I was coaching baseball back in the 1990s, I knew a kid named Royal Ferry.

Real name, real spelling.

Capt Tripps's picture

Worst thing I ever heard on the radio was a snippet of a NASCAR race:  "He started on the pole, and now, I can't believe it... He is lapping Dick Trickle!"

 

/true story

MarcusLCrassus's picture

All time worst has to be "Dick Buttkiss"

lotsoffun's picture

this footballer had a good one:  http://en.wikipedia.org/wiki/Dean_Windass

at least he was the dean of the family

 

junkyardjack's picture

"Egan-Jones Ratings Company"? Hmmm, sounds like a speculator trading on more lies to me. I'm sure JEF would be fine if these speculators stopped trying to release facts.

 

"Science is like a blabbermouth who ruins a movie by telling you how it ends! Well I say there are some things we don't want to know! Important things!" - Ned Flanders

stop.snitching's picture

When are all the (second) European country downgrades coming from EJ?

slaughterer's picture

I would like to see the granular liquidity analysis from EJ and then JEF's refutation.  

slaughterer's picture

77 cents recovery: it was trading at 90 cents just last week.   That IS a haircut for sure.  

Caviar Emptor's picture

 Latvia cancels an auction of 10 year bonds - maybe nothing, but maybe a canary in a coal mine. "My perception of eurozone debt markets is that they are now on strike," says Charles Robertson

http://seekingalpha.com/currents/post/102343?source=kizur

a growing concern's picture

In Soviet Latvia, bonds buy you.

GeneMarchbanks's picture

' "My perception of eurozone debt markets is that they are now on strike," says Charles Robertson '

Way to go Charlie, you certainly have a pair of eyes and firing synapses. Here's a million €.

Seasmoke's picture

Jefferies is fine.............until they arent