Mr Cooper Group Inc (COOP): Some years ago I've postet a link to...

Reply Private New

Replies (2) Next 10 Prev Next

Send PM Follow Ignore

Followers	74
Posts	8773
Boards Moderated	0
Alias Born	06/05/2014

JusticeWillWin

Re: jerrylev post# 515968

Friday, 04/06/2018 2:09:49 AM

Friday, April 06, 2018 2:09:49 AM

Some years ago I've postet a link to a book describing the FDIC receivership process. It said, when selling a bank or part of it, the acquirer assumes the liabilities and gets (quote!) "a like amount of assets" along with the liabilities they assume. I think that is what happened here.

JPMC assumed the complete deposit base of $188B along with other liabilities, totalling the mentioned $258B, and got a "like amount" of also $258B assets, and paid a premium of $1.883B which is (of course by coincidence wink

) exactly(!) 1% of the $188B deposit base. It was common in other receiverships in 2008/2009 to pay exactly 1% for all deposits.

$188B / 100 = $1.88(3)B

So IMO JPMC got only an amount of assets equal to the amount of liabilites they assumed, so that all the liabilites they assumed were backed by those assets. Not more. IMO a part of the assets must be with the FDIC...

Thank you. That is good info.

So you estimate about 40B that JPM didn't get because they don't want it or it is not included in the 1.9B purchase price? Did JPM buy 258B in assets for 1.9B or do they have to pay more?

---------------------------------------------------------
- Just my personal opinion, no investment advice! -
---------------------------------------------------------