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Merrill gets $6.6 billion boost

Merrill receives major investment from Kuwait Investment Authority, Korean Investment Corp. and Japan's Mizuho Corporate Bank.

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By Aaron Smith, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- Wall Street firm Merrill Lynch & Co. Inc. said Tuesday that it had received investment totaling $6.6 billion primarily from three foreign investment funds.

Merrill, the nation's largest broker, will sell preferred stock to the Kuwait Investment Authority, the Korean Investment Corp. and Mizuho Corporate Bank.

TPG-Axon Capital, The New Jersey Division of Investment, The Olayan Group, and T. Rowe Price Associates also are among the investors.

The multi-billion dollar cash injection comes on the heels of the $6.2 billion investment Merrill received last month from Singapore's Temasek Holdings and Davis Selected Advisors.

"One of my main priorities over the last several weeks has been to ensure Merrill Lynch's balance sheet is strong, and these transactions make certain that Merrill Lynch is well-capitalized," Merrill CEO John Thain said in a statement.

Merrill's former CEO Stan O'Neal left the company in October after the firm suffered its biggest quarterly loss ever, due largely to giant write-downs tied to bad bets it made on mortgage investments.

The financial sector overall is reeling from the subprime loan debacle, and analysts are expecting bad news from the major firms that report earnings this week.

Citigroup (C, Fortune 500) said Tuesday that it suffered a nearly $10 billion loss in the fourth quarter. The firm reported an $18 billion write-down related to mortgage investments and said it was slashing its dividend.

Citi also said it received a $12.5 billion infusion from investors in Kuwait, Singapore and the state of New Jersey and intends to raise an additional $2 billion.

Next on tap is J.P. Morgan (JPM, Fortune 500), which reports Wednesday. Merrill is slated to release earnings on Thursday. To top of page

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