Aug. 19 (Bloomberg) -- Lehman Brothers Holdings Inc. may write down about $4 billion in credit-related investments and other assets when it reports fiscal third-quarter earnings, JPMorgan Chase & Co. analysts said.

``The credit environment continues to be difficult,'' New York-based analysts led by Kenneth Worthington wrote in a report yesterday. ``It will be another difficult quarter for Lehman.''

Lehman may mark down some of its $61 billion of mortgage and other asset-backed securities after benchmark residential and commercial mortgage-related indexes declined by as much as 20 percent, the analysts wrote. The company may have already been selling some commercial mortgage assets, they added.

Lehman, the largest underwriter of mortgage bonds before the subprime market collapsed, has slumped 77 percent in New York trading as it struggles to pare its debt holdings. The bank has reported writedowns and credit losses of $8.2 billion in the past 12 months, according to data compiled by Bloomberg.

The analysts cut their per-share estimate for the third quarter to a loss of $3.30 from a 35-cent profit. They expect Lehman to report a loss of $6.77 a share for the full year, compared with their earlier forecast of a $2.35 loss. They maintained a ``neutral'' recommendation on the stock.

Lehman fell 63 cents, or 4.2 percent, to $14.40 at 10:02 a.m. in New York Stock Exchange composite trading. The stock is the worst performer this year in the 11-company Amex Securities Broker/Dealer Index.

`Mortgage Troubles'

``Lehman continues to have significant exposure to mortgages and asset backed securities,'' JPMorgan's Worthington said in the report. ``We believe management wants to leave its mortgage troubles behind and restore confidence.''

Securities firms are cutting their holdings of riskier loans and selling assets to shore up capital. Lehman wants to sell 20 percent of its more than $60 billion of ``distressed'' assets in the third quarter, Merrill Lynch & Co. analyst Guy Moszkowski, said in a July 28 note to clients. He expects the firm to post a $2.5 billion writedown on home loans in the quarter.

The securities firm will probably retain its Neuberger Berman LLC asset-management unit, the JPMorgan analysts said.

``We don't think the ratings agencies would welcome this divestiture,'' they added.

The bank is in talks to sell parts of its investment management unit to potential bidders including private equity firms Carlyle Group, Hellman & Friedman LLC and General Atlantic LLC, the Wall Street Journal reported today.

Lehman has sent them detailed financial information about its hedge funds, private clients, private equity and Neuberger Berman units, the newspaper said, citing people familiar with the matter that it didn't identify. The investment management unit is valued at $8 billion to $10 billion, the newspaper cited analysts as saying.

Patrick Meyer, a spokesman for Lehman in London, declined to comment on the report.

To contact the reporter on this story: Alexis Xydias in London at axydias@bloomberg.net; Joyce Moullakis in London at jmoullakis@bloomberg.net

Last Updated: August 19, 2008 10:05 EDT