Goldman says debt exposure down

By Joseph A. Giannone

NEW YORK (Reuters) - Goldman Sachs Group Inc (GS.N) Chief Financial Officer David Viniar on Tuesday said the bank reduced its exposure to many hard-hit debt markets, though it declined to give details on the size of the investment bank's mortgage-related write-downs this year.

Viniar said there were write-downs but declined to give any details during a conference call with analysts and investors. He would only describe the losses for the fiscal year as "modest," and said they were offset by gains on hedges.

In other areas, Goldman said its fourth-quarter exposures to hard-hit assets had been reduced, in part by taking advantage of a brief thaw in credit markets during October.

The bank's leveraged loan commitments fell by nearly half to $27 billion during the quarter. Goldman sold or canceled $16 billion of financing commitments, funded $9 billion of loans and added $10 billion of new commitments, Viniar said.

Goldman had recorded a $1.7 billion net write-down in the third quarter, reflecting the lack of demand for loans used to fund corporate takeovers.

By the end of November, Goldman's collateralized debt obligations (CDO) exposure fell to less than $400 million and subprime assets declined to about $500 million. Viniar said Level 3 assets -- illiquid securities and holdings with no reliable market value -- were little changed at about 6 percent of total assets.

In a conference call with analysts on Tuesday, Viniar declined to speculate when the subprime markets would return to more normal conditions.

While the rest of Wall Street was forced to write down billions of dollars worth of mortgage securities, CDOs and other debt assets this year, Goldman insisted it would not record any mortgage losses.

The bank's bets against subprime mortgages helped boost profit significantly in the third quarter and contributed to higher fixed-income trading results in the fiscal quarter ended November 30.

(Additional reporting by Tim McLaughlin; Editing by Gary Hill)