Lehman Brothers, the fourth-largest US investment bank, owes its 10 largest unsecured creditors more than $US157 billion, including debts to bondholders totaling $US155 billion and debts to at least seven Japanese bank lenders totaling $US1.62 billion.
The largest single creditor listed in the Chapter 11 filing in US Bankruptcy Court in New York is Aozora Bank, based in Tokyo, owed $US463 million for a bank loan. Other top creditors include Mizuho Corporate Bank, owed $US382 million, and a Citigroup unit based in Hong Kong owed an estimated $US275 million, according to the filing.
''This is the tip of the iceberg. They have more than 100,000 creditors,'' said Peter Chapman, president of Bankruptcy Creditors' Service, which monitors large Chapter 11 cases for interested parties. ''These are just the 30 that get invited to be on an unsecured creditors' committee.''
Lehman said the loans are unsecured, meaning they're not backed by collateral and will be repaid after secured creditors are paid. The New York-based bank listed total debts of $US613 billion and $US639 billion of assets.
''The majority of our exposure is to operating companies other than to the ultimate parent company, Lehman Brothers Holdings,'' Mizuho Financial Group said in a statement on its website. ''Our net exposure is significantly less than reported.''
Masaaki Harada, a Tokyo-based spokesman for Aozora, said the bank was still calculating the extent of its debt to Lehman.
Bondholder Trustees
Lehman said its largest unsecured creditors were Citibank and Bank of New York Mellon in their roles as trustees for bondholders owed an estimated $US155 billion. Bond trustees serve an administrative role and aren't liable for debts to noteholders.
Bank of New York Mellon stressed it had no credit exposure as a result of acting in this capacity. "Under no circumstances will we be liable for any default on the debt by Lehman," the bank said.
Senior unsecured noteholders are owed $US138 billion, subordinated unsecured noteholders are owed $US12 billion and junior subordinated noteholders are owed $US5 billion.
Other Japanese banks that are Lehman creditors include Shinsei Bank, owed $US231 million; Mitsubishi UFJ Financial Group's UFJ Bank affiliate, owed $US185 million; Sumitomo Mitsui Financial Group's banking unit, owed $US177 million; Shinkin Central Bank, owed $US93 million; and Chuo Mitsui Trust & Banking, owed $US93 million.
Mitsubishi UFJ Financial Group is a holding company established through the merger of Mitsubishi Tokyo Financial Group and UFJ Holdings in 2005.
Lehman's most senior bondholders may get about 60 cents on the dollar if the investment bank is forced into liquidation, analysts at CreditSights said. The filing is by Lehman's holding company and won't include any subsidiaries, according to the company.
