The JPMorgan Chase guarantee for Bear Stearns` business commitments has also been clearly clarified and extended. For more information, the guarantee agreement is submitted to the public and the parties provide on their respective websites a question-and-answer document describing the guarantee in more detail. JPMorgan Chase also agreed to guarantee Bear Stearns` loans to the Federal Reserve Bank of New York. Together, Moody`s downgrade and the Fed`s announcement (seen as an anticipation of Bear`s failure) destroyed investor confidence in the company, prompting them to withdraw their investments and refuse to enter into new repo deals. JPMorgan Chase and Bear Stearns have announced an amended merger agreement regarding JPMorgan Chase`s acquisition of Bear Stearns. Pursuant to the revised terms, each share of bear Stearn common shares would be exchanged for 0.21753 JPMorgan Chase common shares (for 0.05473 shares), which corresponds to an implied value of approximately 10 $US per share of Bear Stearns common shares, based on the closing price of JPMorgan Chase common shares on the New York Stock Exchange on March 20. In addition, JPMorgan Chase and Bear Stearns entered into a share purchase agreement under which JPMorgan Chase acquired 95 million newly issued common shares of Bear Stearns or 39.5% of the remaining common shares of Bear Stearns after the issuance took effect at the same price as provided for in the amended merger agreement. As explained below, the purchase of the 95 million shares is expected to be completed on or around April 8. The boards of directors of both companies approved the amended contract and the sales contract. All members of Bear Stearns` Board of Directors have stated that they intend to vote in favour of merging their shares held by the deadline. The JPMorgan Chase guarantee for Bear Stearns` business commitments has also been clearly clarified and extended. For more information, the warranty agreement is submitted to the public and the parties will provide on their respective websites an auestion and response document describing the warranty in more detail.
JPMorgan Chase also agreed to guarantee Bear Stearns` loans to the Federal Reserve Bank of New York. The Federal Reserve Bank of New York`s $30 billion special financing related to the deal has also been altered, so jpmorgan Chase will bear the first billion dollar of all losses related to the funded Bear Stearns assets and the Fed will fund the remaining $29 billion on a non-regressive basis to JPMorgan Chase. . . .