LEAD: Japanese creditors put exposure to Lehman at 440 bil. yen

TOKYO, Sept. 16 Kyodo - (EDS: UPDATING TOTAL FIGURE FROM 430 BILLION YEN TO 440 BILLION YEN, AOZORA BANK'S EXPOSURE)

Japanese financial institutions' exposure to failed U.S. securities house
Lehman Brothers Holdings Inc. totals 440 billion yen, according to data
released by 46 of them on Tuesday.
The exposure in the form of investments and loans, including yen-denominated
bonds and financial derivatives transactions, could force creditors to book
losses and act as a drag on the Japanese economy by prompting them to cut back
on loans to borrowers such as small and midsize companies, analysts said.
Mizuho Trust & Banking Co. said it has lowered its earnings forecast for the
first half of fiscal 2008 as it expects to book losses totaling 11.8 billion
yen as a result of the collapse of Lehman Brothers.
Mizuho Financial Group Inc., the trust bank's parent, estimated its exposure to
the fourth-largest U.S. brokerage at 40 billion yen.
Sumitomo Mitsui Financial Group Inc. announced its exposure to Lehman Brothers
amounts to $980 million (103.4 billion yen) and forecast a loss of 10 billion
yen, while Mitsubishi UFJ Financial Group Inc. said its exposure totals $275
million (28.8 billion yen), resulting in an expected loss of up to 25 billion
yen.
Bankruptcy court filings made by Lehman Brothers on Monday included a list of
major Japanese creditors, putting their total exposure at $1.67 billion (170
billion yen).
The list indicates that Aozora Bank is the largest Japanese creditor.
The bank said its exposure to Lehman Brothers totals 69.26 billion yen, with an
expected loss of up to 2.6 billion yen.
Other Japanese financial institutions on the list include Chuo Mitsui Trust &
Banking Co., Mizuho Corporate Bank, Shinsei Bank and Nippon Life Insurance Co.
Chuo Mitsui Trust Holdings Inc. said its banking unit's exposure to Lehman
Brothers totals 15 billion yen -- 10 billion yen in loans to Lehman Brothers
Japan Inc. and 5 billion yen in credit to the U.S. parent. The list put the
bank's exposure to Lehman Brothers at around 9.5 billion yen.
Nippon Life, whose exposure to the U.S. securities firm is specified at about
4.7 billion yen in the list, has provided a subsidiary of the Japanese unit
with 5 billion yen in loans and owns 5 billion yen in Lehman Brothers bonds,
company officials said.
Kiyo Holdings Inc., Sapporo Hokuyo Holdings Inc. and 28 other regional banks
are also exposed to Lehman Brothers in amounts ranging from 200 million to 7.1
billion yen.
Financial market participants are gravely concerned about the effects of
derivatives transactions which, unlike loans and corporate bonds, are often
untraceable. In particular, losses on credit derivatives, the value of which
derives from credit risks on underlying assets, are likely to be huge, they
warn.
==Kyodo