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Failed IndyMac sold to investor group for $13.9B

By ALAN ZIBEL , 01.02.09, 05:46 PM EST

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A seven-member group of investors has teamed up to buy the remnants of failed lender IndyMac Bank, a symbol of the housing boom and bust, for $13.9 billion, federal regulators said Friday.

IndyMac, which specialized in loans made with little down payment or proof of assets, was seized by the government in July after a run on the bank as the U.S. housing market collapsed.

The Federal Deposit Insurance Corp. said a holding company led by Steven Mnuchin, co-chief executive of private equity firm Dune Capital Management, agreed to buy IndyMac in a deal reached Wednesday and expected to close by early next month.

The investors have formed a partnership, called IMB Management Holdings LP, that includes Dell Inc. founder Michael Dell's investment firm, MSD Capital.

Once the deal closes, the investment group would pour $1.3 billion in new capital into IndyMac and continue to operate the Pasadena, Calif-based bank, the FDIC says.

"We have assembled a group of experienced private investors in financial services to acquire the former IndyMac and operate it under new management with extensive banking experience," Mnuchin said in a statement. "We will inject significant private capital into IndyMac so that it can once again effectively serve its customers and communities."

Other investors in the partnership include five private equity firms or hedge funds: J.C. Flowers & Co.; Stone Point Capital; Paulson & Co.; a fund controlled by billionaire George Soros' Fund Management; and a fund controlled by Silar Advisors LP.

IndyMac has 33 bank branches in Southern California with about $6.5 billion in deposits, about half the company's total at the time of its failure. Other IndyMac assets include a $157.7 billion loan servicing business, which collects mortgages and distributes them to investors, and a reverse-mortgage company, known as Financial Freedom.

As part of the deal, the FDIC agreed to assume losses on a portion of IndyMac's loans. The new investors would shoulder the first 20 percent of the bank's loan losses, with the FDIC taking on the majority of any losses thereafter. The FDIC used a similar loss-sharing agreement when Downey Savings and Loan Association failed in November.

In return, the IndyMac investors agreed to continue a closely watched home-loan modification program launched by FDIC Chairman Sheila Bair in August that has completed about 8,500 loan modifications so far.

The investors have received preliminary clearance from the federal Office of Thrift Supervision to run the bank as a federal savings association. A final decision is expected in the coming weeks.

Thrifts have been the most troubled regulated institutions during the financial crisis and among the most spectacular failures. By law, they must have at least 65 percent of their lending in mortgages and other consumer loans - making them particularly vulnerable to the housing downturn.

FDIC officials noted that private equity firms have bought up failed institutions before. In the early 1990s, two failed banks - Bank of New England and CrossLand Federal Savings Bank - were sold to private equity firms.

Dune Capital was founded in 2004 by former Goldman Sachs Group Inc. partners Mnuchin and Daniel Niedich.

Flowers, who launched, then dropped, a bid to buy student lender Sallie Mae last year, also is a former Goldman Sachs partner. Paulson & Co. made billions in profits in recent years by betting on the failure of risky home loans.

The IndyMac deal comes as regulators have eased restrictions on such purchases. Previously, private-equity firms could not hold more than a 24.9 percent stake in a bank without becoming a bank-holding company.

The failure of IndyMac, which had $32 billion in assets, was the second-largest last year, trailing only the September failure of Washington Mutual Inc. Losses to the FDIC's bank insurance fund are expected to range between $8.5 billion and $9.4 billion.

The Seattle-based thrift was the biggest bank to collapse in U.S. history, with around $307 billion in assets. Washington Mutual was acquired by JPMorgan Chase & Co. for $1.9 billion.

A total of 25 U.S. bank failures in 2008 compare with three for all of 2007 and are far more than in the previous five years combined. Many more banks are expected to sink this year.

One unresolved issue is IndyMac's relationship with investors in mortgage-linked securities, including Fannie Mae and Freddie Mac, the government-controlled mortgage finance titans.

Fannie, Freddie and other investors have the right to try to return IndyMac loans if they claim they violate the terms under which they buy mortgages. About $1 billion in loans owned or guaranteed by Fannie Mae are in question.

Fannie Mae "is working constructively with the FDIC and IndyMac to reach a resolution that is in the best interests of all parties involved," Fannie spokesman Chuck Greener said Friday.

 

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

 

www.fidic.gov/bank/individual/failed/IndyMac.html

IndyMac Bancorp Inc.
888 East Walnut Street
Pasadena, CA 91101-7211

Phone: 800-669-2300
Fax: 626-535-8203

Website:
http://www.indymacbank.com 
 

Pink Sheets Information

  • Estimated Market Cap

    14,124,386 as of Jul 18, 2008
  • Outstanding Shares

    100,888,469 as of May 6, 2008
  • Number of Share Holders of Record

    1,847 as of Feb 29, 2008
      

 

 

PostSubject
#3291   U.S. Bankruptcy Court Enterprising Investor 03/21/15 05:38:32 PM
#3290   It's a start but I will email S&G HROLLER 12/14/11 12:20:35 AM
#3289   I did th romang 12/14/11 12:18:32 AM
#3288   It's not too early.....The earlier the better. Can HROLLER 12/14/11 12:07:17 AM
#3287   I already have mine ready when can we.send romang 12/13/11 11:55:26 PM
#3286   I'm banned from the other board but I HROLLER 12/13/11 11:38:59 PM
#3285   IDMCQ and all classes revoked : Renee 03/03/11 09:35:16 AM
#3284   SEC Charges Former Mortgage Lending Executives With Securities Fraud nodummy 02/11/11 05:50:17 PM
#3283   I do not think the shareholders will get Value_Investor 02/04/11 03:12:42 PM
#3282   whats going on with this stock is it buzztech911 02/04/11 11:01:32 AM
#3281   It is up 60% already from 0.0055 to Value_Investor 02/02/11 02:09:47 PM
#3280   It is the first time the bid x Value_Investor 02/01/11 11:26:45 AM
#3279   I have no plans of selling at all. Bullstocks 01/31/11 01:07:43 PM
#3278   Hopefully this week will finally start the rally Value_Investor 01/31/11 01:05:49 PM
#3277   It is hard to understand the very strong Value_Investor 01/27/11 11:12:52 AM
#3276   Who are such stupid which kept dumping the Value_Investor 01/21/11 03:17:18 PM
#3275   Who are those very stupid sellers who are Value_Investor 01/19/11 10:30:52 AM
#3274   I am very glad to see 0.008 has Value_Investor 01/18/11 11:52:15 AM
#3273   Survey: how many shares do you guys own Value_Investor 01/14/11 12:51:11 PM
#3272   Who are those very stupid sellers who dumped Value_Investor 01/12/11 10:32:11 AM
#3271   Near 8M shares dumped at 0.0055 ~ 0.01 Value_Investor 01/11/11 02:42:57 PM
#3270   IDMCQ has finally bottomed out at 0.0055 and Value_Investor 01/10/11 02:39:01 PM
#3269   If oversold, would you buy at this level? jimmyturbine 01/09/11 01:22:53 PM
#3268   I am very glad to see IDMCQ has Value_Investor 01/06/11 10:35:04 AM
#3267   Who are selling the endless shares at 0.007 Value_Investor 01/05/11 12:04:39 PM
#3266   Why the CH7 bank stock had been suffering Value_Investor 01/04/11 01:58:35 PM
#3265   Value I think I may have mis-spoken but jimmyturbine 12/30/10 01:07:09 PM
#3264   I love Q-plays. This is going to Bullstocks 12/30/10 12:24:24 PM
#3263   May I ask who assigned me on Mod's MASTERTRADER 12/30/10 12:02:05 AM
#3262   The new 52-week low 0.0055 was created today! Value_Investor 12/29/10 10:01:42 AM
#3261   As of today over 2M shares dumped at Value_Investor 12/28/10 05:37:27 PM
#3260   Near 1M shares dumped at 0.0075 ~ 0.008 Value_Investor 12/27/10 03:21:00 PM
#3259   New 52-week low 0.0056 was created last week! Value_Investor 12/21/10 05:25:22 PM
#3258   have had this stock in my favorites for awhile! jimmyturbine 12/08/10 01:12:25 PM
#3257   New 52-week low 0.0111 was created today! Sell Value_Investor 12/01/10 01:45:38 PM
#3256   New 52-week low 0.0117 was created today! Sell Value_Investor 11/30/10 02:41:22 PM
#3255   New 52-week low .012 was created today! Sell Value_Investor 11/29/10 11:52:39 AM
#3254   New 52-week low .013 was created today! Sell Value_Investor 11/23/10 04:54:31 PM
#3253   http://seekingalpha.com/instablog/685942-gelsicapital/81864-indymac-rip romang 07/15/10 08:29:13 AM
#3252   when is this stock going to do something? TallRob0 05/13/10 02:13:32 PM
#3251   i really think yor right out of all sleepingGiants 05/03/10 03:55:59 PM
#3250   Good Mornings,, Hope you make a million this FORDGT 04/30/10 08:23:31 AM
#3249   I hope wamuq jumps first.so i can take TallRob0 04/29/10 03:30:11 PM
#3248   WON'T BE LONG.. THERE IS A HARD PRESS FORDGT 04/29/10 04:39:41 AM
#3247   anything above .10 would be nice sleepingGiants 04/28/10 06:23:52 PM
#3246   yeah, getting some action,,,nice. TallRob0 04/28/10 11:16:31 AM
#3245   3 bucks would be sweet... I think 4 FORDGT 04/27/10 09:53:06 AM
#3244   a few bucks is a safe bet TallRob0 04/27/10 09:31:49 AM
#3243   What a awsome chart any speculation on p/s sleepingGiants 04/27/10 12:22:13 AM
#3242   yep, something is happening..... TallRob0 04/26/10 04:03:52 PM
PostSubject