Moody's cuts Lehman, Jefferies outlook to stable

LONDON, March 17 (Reuters) - Moody's Investors Service on Monday cut the rating outlook on U.S. investment banks Lehman Brothers LEH.N and Jefferies Group (JEF.N) to stable from positive, meaning the ratings are not expected to rise. Moody's affirmed Lehman's rating at A1 and Jefferies' at Baa1, but said both banks faced challenges.

"Recent events impacting numerous financial institutions and culminating with Bear Stearns BSC.N liquidity problems highlight the high (and arguably unprecedented) degree of financial-system stress that has emerged over the past eight months," Moody's said in a statement.

As a result, upgrades are no longer likely for the two firms.

Moody's said both Lehman and Jefferies had robust liquidity positions. For Moody's full statements, please double click on [ID:nWLB8686] for Lehman and [ID:nWLB8687] for Jefferies.

(Reporting by Richard Barley)