Financial Winners and Losers: E*Trade

(Updates stock price moves throughout)

Financial stocks finished lower Monday, with E*Trade Financial (ETFC Quote) among the decliners after the company announced it has launched a debt exchange.

E*Trade on Monday launched a $1 billion debt exchange offering as part of its capital restructuring plan announced last week.

E*Trade is offering to exchange more than $1 billion of convertible debentures due in 2019 for all of its 8% senior notes due in 2011. The company is also offering the exchange to holders of a portion of its 12.5% springing lien notes due in 2017, it said. Citadel Investment Group, E*Trade's largest stock and bondholder, has agreed to participate in the debt exchange offer.

Shares of E*Trade ended down 5.6% to $1.19. The stock is still higher by about 7% in 2009. TD Ameritrade (AMTD Quote) shares slid 4.2% to $16.63.

Goldman Sachs (GS Quote) is reportedly on pace to pay out record bonuses after a strong first half of 2009. The Guardian reported that the firm's London staff they could look forward to the bonus hikes if the company registers its most profitable year ever. A drop in competition and a surge in revenue from trading foreign currency, bonds and fixed-income products have benefitted the company, the newspaper said.

Goldman shares finished down 4.3% to $137.01. Among related stocks, JPMorgan Chase (JPM Quote) was gave back 6.1%, Morgan Stanley (MS Quote) slid 5.8%, and Barclays (BCS Quote) lost 7.2%.

Elsewhere, Citigroup (C Quote) said late Friday that Ajay Banga, the chief executive of Citi Asia Pacific, will leave the firm to assume the number two spot at MasterCard (MA Quote).