Charles Schwab Corp. expects to book $75 million of third-quarter pretax charges for the debt securities it holds in Lehman Brothers and Washington Mutual Inc., both of which have filed for bankruptcy protection.
In a filing Monday with the Securities and Exchange Commission, Schwab said it does not hold any debt securities issued by Merrill Lynch & Co. Inc. or American International Group Inc.
Schwab said it held $50 million of Lehman senior floating rate notes due in 2009 and 2010. As of Friday these notes were valued at about 15% of par, resulting in an estimated pretax charge of $40 million.
The brokerage also said it held $39 million of Wamu bank senior floating-rate notes due in 2009. As of Friday these notes were valued at about 10% of par, resulting in an estimated pretax charge of $35 million, Schwab said. The Federal Deposit Insurance Corp. seized Wamu last week.
