Mr Cooper Group Inc (COOP)

[JusticeWillWin]

Read and digest also this (last post for today)

Read it word by word:

Page 6 (=PDF page 8):
http://www.grantthornton.com/staticfiles/GTCom/Financial%20services/FDIC/Web_What%20you%20need%20to%20know%20about%20FDIC-assisted%20transactions_Feb%202011.pdf

The splitting into deposit premium and asset premium/discount the FDIC introduced later than 2008 and you can find it in newer P&As from 2010 and 2013 I've posted today. But it does not matter, in 2008 it was combined in the single bid amount of 1.88 bln. IMO

The bid consists of two components:
1. Deposit premium – [does not matter for WaMu P&A]
2. Asset premium/discount – an amount over or below the book value of the assets, which adjusts the book value of the assets to the bidder’s estimate of fair value. In most cases, this number is a discount from the book value.

Not in our case!

And...

It is important to note that in FDIC-facilitated transactions the acquirer is rarely required to make a payment to the receiver (the FDIC). Rather, successful bidders determine whether the FDIC will make a payment upon closing to the acquirer (if the winning bid is negative) or whether the acquirer will be required to absorb losses through a “first-loss tranche” prior to any losssharing (if the winning bid is positive – meaning the acquirer would normally provide cash consideration to the receiver). The determination of whether the winning bid is positive or negative is based on the deposit premium, asset premium/discount and transactional equity, which represent the net of the acquired assets and assumed liabilities (as computed by the FDIC at closing).

Rarely required BUT in our case!