Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger
Walmart's New Health Food Push: Is It Too Hard to Swallow?
KeyCorp (NYSE: KEY), which is the third largest bank in Ohio, has survived many challenging market environments. After all, the bank's roots go back to 1825.
However, the latest credit crisis has been particularly tough. Over the past year, the stock price has plunged from $37 to $11.46.
Well, this week, KeyCorp raised $1.65 billion from a common and preferred stock offering. Actually, the company was able to sell 10% more than expected.
Like other banks, KeyCorp binged on loans over the past few years. In fact, a big piece of the lending was for residential real estate construction (especially in California and Florida). Needless to say, those loans are shaky now.
Something else: KeyCorp needs to take a sizable charge for an adverse court ruling because of leveraged lease transactions.
As a result, KeyCorp expects to report a $1.1 billion to $1.2 billion loss for Q2. And, after 43 years of increases in dividends, the company also had to slash its payout by half.
Tom Taulli is the author of various books, including The Complete M&A Handbook
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
