Lehman Brothers Holdings Inc. may set up a company funded by outside investors to buy some of its mortgage assets, aiming to dispel concern that the company faces crippling losses, people familiar with the discussions said.
Investors in the venture would also manage the holdings, which are linked to commercial real estate, the people said, declining to be identified because the proposal has not been made public and no decision has been made about how to proceed.
The New York company had about $40 billion of commercial mortgage assets in May.
Lehman, the largest underwriter of mortgage bonds last year, has been trying to reduce assets linked to that market as demand dried up and prices plummeted, generating more than $8 billion of writedowns and credit losses. BlackRock Inc., the largest publicly traded U.S. money manager, is considering a purchase of some of Lehman's commercial mortgages, people familiar with those talks said last week.
"They need to reassure investors by offloading some of these assets," said Mayiz Habbal, an analyst at the Boston research firm Celent LLC. "Lehman isn't negotiating from a position of strength."
The company has lost almost 80% of its value on the New York Stock Exchange this year as it tried to reassure investors it will not suffer the same fate as a smaller rival, Bear Stearns Cos.