Merrill Takes $11.5 Bln Write-Down

Merrill Lynch exposed billions more in losses related to the troubled mortgage lending market on Thursday, with newly hired chief executive calling the latest quarterly results clearly unacceptable as the company moves to straighten out its balances.

The brokerage and investment bank lopped off a chunk of the value of its mortgage-related assets with an $11.5 billion write-down in its last quarter, while recording an overall loss of $9.3 billion for the same period.

A separate $3.1 billion write-down was made on hedges with financial guarantors.

The nearly $10 billion loss this quarter compared to net profit last year of $2.3 billion during the same period, or a loss of $12.01 per share and gain of $2.41 per share respectively.

While the firm's earnings performance for the year is clearly unacceptable, over the last few weeks we have substantially strengthened the firm's liquidity and balance

sheet, said John A. Thain, chairman and chief executive officer.

While the firm's earnings performance for the year is clearly unacceptable, over the last few weeks we have substantially strengthened the firm's liquidity and balance

sheet, said John Thain, chairman and chief executive officer at Merrill.

The company has been moving to straighten out its balances by securing $12.8 billion in recent weeks, mostly from foreign investments.

On Tuesday, the company announced it agreed to a $6.6 billion stock sale to investors from Korean Investment Corp., Kuwait Investment Authority and Mizuho Corporate Bank. In late December, Merrill said it would sell $6.2 billion in shares to Singapore state-run fund Temasek Holdings and Davis Selected Advisers.

The latest results mean that Merrill had a loss for all of fiscal 2007 of $7.78 billion.

We are comfortable that we are in good shape going into the future, Thain said during a conference call with analysts this morning.

This week, rival Citigroup also reported big losses due to the mortgage market, making an $18 billion write-down for a loss of $9.83 billion in its latest quarter.