* S&P says MF Global touted capital, liquidity strength
* One week after email to S&P, MF Global failed
* House lawmakers to press rating firms at Thursday hearing (Adds comment from an MF Global spokesperson)
WASHINGTON, Jan 30 (Reuters) - Just a week before futures brokerage MF Global filed for bankruptcy, the firm's chief financial officer told analysts at Standard & Poor's that its capital position had "never been stronger," according to the ratings agency.
The behind-the-scenes details about MF Global's dealings with McGraw Hill's Standard & Poor's came in a Jan. 17 letter from the rating agency's managing director Craig Parmelee to lawmakers investigating the role that ratings agencies and risk officers played in the collapse of MF Global.
MF Global filed for bankruptcy on Oct. 31 after investors and customers became rattled over the firm's $6.3 billion bet on European sovereign debt.
Congressman Randy Neugebauer, who chairs a House Financial Services investigative panel, is presiding over a hearing on Thursday to study the vigilance of the rating agencies, which did not significantly downgrade MF Global until just days before, or hours after, it filed for bankruptcy.
In the letter to Neugebauer, Parmelee said that MF Global's Chief Financial Officer Henri Steenkamp sent an email on Oct. 24 to S&P saying that "MF Global's capital and liquidity has never been stronger" and that "MF Global is in its strongest position ever as public entity."
The email from Steenkamp to S&P analysts was sent on the same day the rating firm's competitor, Moody's Corp, downgraded MF Global to near-junk status. Steenkamp also made similar comments during an earnings call the following day.
A spokesperson for MF Global Holdings said Steenkamp's statement was "accurate at the time" it was written.
A spokesman for S&P declined to comment.
The S&P letter was first reported by Bloomberg News.
Representatives from S&P and Moody's are expected to testify at Thursday's hearing, along with Michael Roseman, the former chief risk officer who is said to have raised red flags about aggressive trading bets at MF Global.
Michael Stockman, who succeeded Roseman as chief risk officer for MF Global, is expected to testify.
Lawmakers are likely to dig into questions surrounding just how much information the rating agencies had about MF Global's financial position, and possibly why they did not take rating actions sooner.
MF Global's collapse was partially triggered by Moody's Oct. 24 downgrade of MF Global. Moody's and Fimalac SA's Fitch Ratings later both downgraded MF Global to junk on Oct. 27.
S&P, meanwhile, warned of a possible downgrade on Oct. 26, but did not take any rating action until after MF Global filed for bankruptcy.
The rating actions all came in October even though in May 2011 MF Global revealed in a company filing that it made repurchase-to-maturity trades collateralized with European sovereign debt in the footnote of a filing with the U.S. Securities and Exchange Commission.
When asked by lawmakers whether S&P was aware of this disclosure, Parmelee said S&P "had received no advance notice" about the disclosure, but that it "appeared to cause virtually no immediate reaction in the markets."
"In fact, in August 2011, more than six weeks after the initial disclosure, MF Global successfully issued hundreds of millions of dollars of bonds with relative ease, suggesting that investors continued to have confidence in the firm and its prospects," he added. (Reporting by Sarah N. Lynch; Editing by Gary Hill, Phil Berlowitz)
Our 2024 Coverage Needs You
It's Another Trump-Biden Showdown — And We Need Your Help
The Future Of Democracy Is At Stake
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
The 2024 election is heating up, and women's rights, health care, voting rights, and the very future of democracy are all at stake. Donald Trump will face Joe Biden in the most consequential vote of our time. And HuffPost will be there, covering every twist and turn. America's future hangs in the balance. Would you consider contributing to support our journalism and keep it free for all during this critical season?
HuffPost believes news should be accessible to everyone, regardless of their ability to pay for it. We rely on readers like you to help fund our work. Any contribution you can make — even as little as $2 — goes directly toward supporting the impactful journalism that we will continue to produce this year. Thank you for being part of our story.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
It's official: Donald Trump will face Joe Biden this fall in the presidential election. As we face the most consequential presidential election of our time, HuffPost is committed to bringing you up-to-date, accurate news about the 2024 race. While other outlets have retreated behind paywalls, you can trust our news will stay free.
But we can't do it without your help. Reader funding is one of the key ways we support our newsroom. Would you consider making a donation to help fund our news during this critical time? Your contributions are vital to supporting a free press.
Contribute as little as $2 to keep our journalism free and accessible to all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Can't afford to donate? Support HuffPost by creating a free account and log in while you read.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circumstances have changed since you last contributed, we hope you'll consider contributing to HuffPost once more.
Support HuffPostAlready contributed? Log in to hide these messages.