Lloyd helps himself to the Fed vault.
As CEO of Government Sachs, he knows the combination.
---
Goldman Earned $55.7 Million From Build America Fees
(Bloomberg) -- Goldman Sachs Group Inc., the most profitable securities firm in Wall Street history, has made $55.7 million from the sale of $36.4 billion of Build America Bonds, about a third of the fees it earned from its municipal business, it said in response to queries from Iowa Senator Charles Grassley.
The effort to underwrite the federally subsidized municipal bonds is “highly competitive” with “over 10 major firms” vying for the business, Goldman Chairman Lloyd Blankfein wrote in a letter dated March 1 to the top Republican on the U.S. Senate Finance Committee. Grassley said in a letter to Blankfein last month that he is “concerned that American taxpayers are subsidizing larger underwriting fees for Wall Street investment banks.”
Congress created the Build America Bond program last year as part of the $862 billion American Recovery and Reinvestment Act in an effort to revive the $2.8 trillion municipal bond market. The U.S. Treasury pays 35 percent of the interest cost if states and local governments sell the taxable securities for their capital projects instead of tax-exempt debt.
Goldman, which got $10 billion in taxpayer bailout money amid the credit crisis in 2008, was paid $54 million to lead underwrite or help sell $34 billion of the bonds and $1.7 million to serve as an adviser on a separate $2.4 billion of Build America Bond sales, the bank told Grassley’s office in a second communication dated March 9. Jill Gerber, a Grassley spokeswoman, confirmed the content of the letters.
Blankfein replied to Grassley that the bank is paid to “educate the market about the issuer and the securities they are offering,” as well as “assume the risk of underwriting.” He said that as Build America Bonds “have become better known to investors, underwriting fees have come down.”
Goldman charges a fee of between 0.6 percent and 0.875 percent of the borrowed amount of money to underwrite Build America Bonds, compared with 0.875 percent for investment-grade corporate bonds and 0.5 percent to 0.625 percent for tax-exempt municipal securities, Blankfein said. Michael DuVally, a spokesman for New York-based Goldman Sachs, declined to comment further.
Continue reading at Bloomberg...
#
Lloyd Blankfein wins Douchebag of the year...
#
No comments:
Post a Comment