Round up - August 15

Schroders warns of 25pc cut in exit prices

Financial Times

Schroders has warned investors in one of the biggest real estate vehicles that up to 25pc will be cut from the price of their units should they exit because of paralysis in the UK property investment market. Existing investors in the £1.4bn Schroders Exempt Property Unit Trust have been told that the value of their holdings could be reduced by 25pc, reflecting the difficulties that Schroders would have if it tried to sell properties quickly in the market to cover these redemptions. Schroders is facing redemptions of about £70m or 5pc of the fund.

JPMorgan raises $1.6bn (£862m) to boost balance sheet

Financial Times

JPMorgan Chase raised $1.6bn (£862m) in hybrid securities to bolster its balance sheet yesterday but had to pledge to pay a high interest rate to lure investors. Bankers close to the deal said JPMorgan’s assurance of preferred debt, a security that is a mixture of equities and bonds, paid an annual interest rate of 8.625pc, which is the highest rate offered by the bank on preferred debt since the merger that created it in 2000 and nearly 10pc higher than JPMorgan’s previous issuance of hybrid securities in April, according to Dealogic.

Eurozone teeters on brink of recession after output drops for the first time

The Guardian

The Eurozone suffered its first period of falling output during the spring as its three largest economies, Germnay, France and Italy shrank, according to figures released yesterday. EU statistics office Eurostat said gross domestic product in the Eurozone’s 15 counties contracted by 0.2pc in the second quarter of 2008, the first time growth has been negative since the launch of the Euro in 1999.