JPMorgan raises $1.6 billion

JPMorgan Chase was able to raise $1.6 billion to buttress its balance sheet, but the money did not come cheap. The preferred debt issue carries a whopping 8.7 percent interest rate. The Financial Times reports that this is the highest rate offered by the bank on preferred debt since the big merger in 2000, nearly 10 percent higher than JPMorgan's previous offering of hybrid securities in April (Dealogic). Let's face it, there's really no easy way of raising capital without punishing shareholders. The issue here is whether there are other capital raises in sight for JPMorgan. The banks is taking pains to underscore that the offering was not a response to the surprise $1.5 billion loss the bank suffered in July due to credit valuations. Still, some are growing a bit nervous, as we've noted, about JPMorgan's Alt-A and commercial real estate-backed portfolios.

For more:
- here's the FT article