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Egan-Jones Ratings co-founder Sean Egan on cutting Knight Capital's rating.
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It's our ratings agency Egan Jones downgrading Knight Capital Group for a second straight day to B minus from -- calling betraying not debilitating here with us.
With the call a shot meeting co-founder and president of Egan Jones Sean thank you for coming to the -- we appreciate your time not a problem I you heard Charlie's reporting before you.
Does that sound like what you've been hearing on your -- It -- with the kind of focused on.
Due to waters 2000 all at this point -- walk into the food group of girls.
Selling them probably very -- called because it normally takes about ninety -- under the best circumstances develop because the due diligence and documentation.
The only thing that the problem can do is raise as large -- cap it off with these market cap at approximately.
300 million.
The real promise they can raise maybe 20% of that maybe 25%.
-- -- get a good I ended 33% that the hundred million but fortunately the company needs a lot more than that.
If they reported no wrong so 400 -- 1000440.
Million.
And they probably need about 600.
Million of equity cap it all and it's very tough to get -- the market cap nearly 300.
So is there anything else that can do besides raising equity capital I mean.
Any other way to raise capital can they get key line of credit and anything else -- you're making it sound hopeless.
It's very difficult they can I have some kind of special operating agreement with the major play -- And and hopefully ride this out by the need to they're not getting much comfort in the equity markets and that.
That in -- 1000 banker would say that he he just can't raise the big -- and you know appears.
Yet China was reporting that they're going to JPMorgan for some sort of emergency capital you don't think they can fill the gap at this point.
It if they might get some some non equity capital although -- that maybe they need to clean equity to calm the markets you're gonna see -- departure of customers have under the normal circumstances Atlanta they've become a market by putting some cash on the table.
Is there any fallout from this beyond Knight capital do you see it spreading I mean are there.
Is -- counterparty risk is there are more that we should be looking out.
Did yeah.
We don't know yet we have to -- FAA -- that's it's part of our job to look at the secondary interstate.
Impact of this clearly -- MF global after all they've heard a lot of farms.
Hopefully.
Probably looking at this then and and they can deal a bit but it's something that where were driving will be -- over the next couple hours.
It of course the reports are from there press release you know that this was only their capital that it didn't impact.
Client funds in any way do you agree with that believe that except that.
Okay that's the -- is that turned out not to be indicated MF global all.
Hopefully they cap goes better run than MF.
Global Sean -- we really appreciate your time thank you so much for coming on not a.
