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WM WaMu out of the woods
at Fortune(Mon 7:02am)

Washington Mutual (WM) is out of the woods. The Seattle-based bank is getting $5 billion in new capital from a group led by private equity firm TPG, The Wall Street Journal reports. The infusion comes just two weeks ahead of the bank’s scheduled first-quarter earnings release and on the heels of the latest selloff in the company’s stock. WaMu shares fell 11% Friday amid worries about the bank’s exposure to weakening housing prices.

WaMu will raise money through offerings of common and preferred stock, the Journal reports, and a deal would give TPG a large stake, though one that would fall below the 25% threshold for financial company registration. The sale stands to add to the pain for Washington Mutual shareholders, whose investments in the bank have lost nearly three-quarters of their value over the past year. On the other hand, as the Bear Stearns (BSC) case shows, better safe than sorry.

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