PE group buys IndyMac (taxpayers get shafted)

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January 2, 2009 at 3:10 PM #14735

TheBreeze
Participant

It looks like the taxpayers (and IndyMac depositors) are taking it in the shorts again:

The complete sale of the bank includes 33 branches, a reverse-mortgage unit and a $176 billion loan-servicing portfolio. The FDIC has agreed to share losses on a portfolio of qualifying loans with New IndyMac assuming the first 20 percent of losses. From there, the FDIC will split losses 80/20 for the next 10 percent of losses and 95/5 thereafter.

http://www.housingwire.com/2009/01/02/sale-of-indymac-to-private-equity-investors-approved/

So the taxpayers get to share in the downside but not in the upside. Way to look out for the taxpayer, FDIC! This is just more of the same — privatize the gains, socialize the losses

The FDIC said it is selling the assets of IndyMac, which has been run by the agency since the lender failed in July, to IMB HoldCo in a deal valued at about $13.9 billion.

The private equity group is putting up about $1.3 billion in cash to capitalize IndyMac when the deal closes, which is expected in late January or early February, the FDIC said.

…

The purchase will include IndyMac’s 33 branches with about $6.5 billion in deposits, as well as loan and securities portfolios worth about $22.9 billion. IMB HoldCo is also buying a mortgage servicing portfolio worth more than $175 billion.

…

The mortgage specialist’s IndyMac Bank unit was taken over by regulators after it failed on July 11, making it one of the largest bank failures in U.S. history. At the time, it had $32 billion in assets and $19 billion in deposits.

http://www.reuters.com/article/americasDealsNews/idUSTRE5014DP20090102?pageNumber=2&virtualBrandChannel=0

So the PE guys are putting up $1.3 billion on an asset valued at $13.90 billion. Presumably, the federal government is financing the rest. So the taxpayers are financing 91% of this deal and we get to share in a substantial portion of the losses on the loan portfolio. This is effin’ horrible!

Those people who held the $12.5 billion in deposits that disappeared are also getting screwed. If I was in that group, I’d be forming a class action to sue and stop this deal.

There was a private equity guy on this forum who was claiming that this deal marked some type of bottom in the value of mortgage loan portfolios. That claim looks like a total joke now. This is another sweetheart deal from the Bush administration. Basically it’s a giveaway of taxpayer money to rich assholes.

For an interesting take on private equity firms in general, check out this article:

http://www.vanityfair.com/politics/features/2009/02/wolff200902?printable=true&currentPage=all

And yet, it seemed important to contrast the existential predicament of private-equity funds—the most debt-ridden enterprises in the history of finance, with some $4 trillion due to lenders in the next year (it is mathematically impossible, given the downturn, for even a fraction of that to be paid back in a timely fashion)—with the fact we were sitting here in Monaco, in a scene that might well have occurred at the very top of the market. To the naked eye, nothing had changed.

…

Quadrangle, Rattner’s firm, which specializes in media deals, bought Maxim magazine for $250 million a year ago—borrowing most of the money to do the deal. This was already a deal burdened by the hubris of private equity—that is, the company that owned the magazine (and specialized in publishing magazines) was unloading it precisely because it understood the market for laddie magazines had peaked (a year before, the company had spurned a much higher offer). But Quadrangle, even though it had no experience in the publishing business, assumed that with its business prowess (P.E. types who seldom have managed anything nevertheless believe themselves to be consummate managers) it could cut costs and raise cash flow and expand into new lines of business—Quadrangle envisioned Maxim-themed movies and restaurants and tchotchke shops. This general hubris and belief in business prowess come because, while P.E. firms have so often been Keystone Kop sorts of managers, the economy has over and over again proved their competence. Or, at any rate, the rising economy meant that all sorts of mistakes would be covered by a rich resale price. In a sense, with the market constantly rising, you could do nothing wrong—until now. Accordingly, the Maxim business went from making $28 million to making $8 million annually, which is not enough to pay the costs of the debt it incurred. Hence, Quadrangle Group, which recently admitted defeat and closed its hedge-fund arm (sometimes called, confusingly, the Quadrangle Fund, which, when I was in Monaco, meant that a rumor swept the Hôtel de Paris that Quadrangle itself had collapsed), is now trying to give Maxim back to its creditors.

…

Then there’s the debt—the mountains of debt. The major private-equity firms are, with a little critical interpretation, like subprime-mortgage holders. In order for the banks to get the business of private-equity firms, they gave deals they should never have given. Actually, loans to P.E.-backed companies are, in many instances, far worse and far more risky than subprime loans, which at least can be foreclosed on. The major P.E. firms in the riskiest of deals have gotten the most liberal terms possible—they almost can’t go belly-up. What’s more, it is important to remember that, if the private-equity game is played correctly, you don’t have that much money in any single deal. The lenders are on the hook. (The partners at Quadrangle can wash their hands of Maxim and still show up at work the next day.) You’re not. If it does well, you benefit disproportionately; if it goes south, you suffer minimally.

…

Indeed, the complaint of all companies owned by private-equity firms is that, previously left alone by their remote investor-owners, they are now enduring the attention of the private-equity guys who have so much less to do (and no idea what they are doing).

…

And yet, being comfortable with there being no there there is the talent. That’s the private-equity genius: We’ve figured out how to buy companies without putting up the money; we’ve figured out how to run them without knowing anything about them. The situation has just gotten more fluid—the banks don’t have money to give us, and God himself couldn’t turn a profit at most companies now. But somewhere, sometime soon, if we can just bluff it out, there is opportunity. Amazing opportunity.

So it looks like the PE guys can’t get capital from private sources anymore, but they can still count on the Bush administration to give them taxpayer money.

Oh yeah, not only are these guys robbing the taxpayer, they don’t pay any income tax themselves:

Private equity funds, however, typically invest on a longer horizon, with the result that income earned by the funds is long-term capital gain, taxable to individuals at a maximum 15% rate. Because the 20% profits share typically is the bulk of the manager’s compensation, and because this compensation can reach, in the case of the most successful funds, enormous figures, concern has been raised, both in Congress and in the media, that managers are taking advantage of tax loopholes to receive what is effectively a salary without paying the ordinary 35% marginal income tax rates that an average person would have to pay on such income.

http://en.wikipedia.org/wiki/Taxation_of_private_equity_and_hedge_funds

January 2, 2009 at 3:40 PM #322715

TheBreeze
Participant

By the way, my prediction on this deal: The PE guys find a way to saddle IndyMac with enormous debt while making out like bandits for themselves. IndyMac fails again within three years with the taxpayers taking an even bigger hit than they took the first time.

January 2, 2009 at 3:40 PM #323216

TheBreeze
Participant

By the way, my prediction on this deal: The PE guys find a way to saddle IndyMac with enormous debt while making out like bandits for themselves. IndyMac fails again within three years with the taxpayers taking an even bigger hit than they took the first time.

January 2, 2009 at 3:40 PM #323136

TheBreeze
Participant

By the way, my prediction on this deal: The PE guys find a way to saddle IndyMac with enormous debt while making out like bandits for themselves. IndyMac fails again within three years with the taxpayers taking an even bigger hit than they took the first time.

January 2, 2009 at 3:40 PM #323059

TheBreeze
Participant

By the way, my prediction on this deal: The PE guys find a way to saddle IndyMac with enormous debt while making out like bandits for themselves. IndyMac fails again within three years with the taxpayers taking an even bigger hit than they took the first time.

January 2, 2009 at 3:40 PM #323120

TheBreeze
Participant

By the way, my prediction on this deal: The PE guys find a way to saddle IndyMac with enormous debt while making out like bandits for themselves. IndyMac fails again within three years with the taxpayers taking an even bigger hit than they took the first time.

January 2, 2009 at 4:04 PM #323146

davelj
Participant

Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.

Now, part of the problem here is that I THINK the reported “deal value” is not the ACTUAL deal value. From what I can gather, the FDIC is selling ASSETS with a (discounted) value of $13.9 billion (in addition to deposits and branches) to IMB, whereby IMB will put up $1.3 billion in cash in order to capitalize the company. I believe that in this instance the reporters (who will just quote each other until someone corrects them) are confusing the amount of assets being sold with the “deal value,” not realizing that a bunch of liabilities are being transferred along with the assets. Reporters often get the facts confused in complicated deals (which this one is).

For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.

I suspect that the investor group is putting up $1.3 billion in cash to capitalize the new company, then they’re taking on $6.5 billion in deposits, they’ll raise another $2 billion in the wholesale deposit market, and fund the remainder of the assets with FHLB borrowings. That would result in a pretty normal S&L structure. And then they have the loss sharing agreement with the FDIC.

Now, my read could be wrong here. And I’m willing to admit that. But what I know for sure is that we still don’t have enough information on this transaction to know exactly what’s going on here. So, why don’t we heed the following from the FDIC’s website and wait until we have more info: “The transaction is expected to close in late January or early February, at which time full details of the agreement will be provided.” This may be a horrible deal for us taxpayers. But, frankly, until we see the balance sheet and actually understand more about the deal, we simply don’t have enough information to know.

January 2, 2009 at 4:04 PM #323226

davelj
Participant

Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.

Now, part of the problem here is that I THINK the reported “deal value” is not the ACTUAL deal value. From what I can gather, the FDIC is selling ASSETS with a (discounted) value of $13.9 billion (in addition to deposits and branches) to IMB, whereby IMB will put up $1.3 billion in cash in order to capitalize the company. I believe that in this instance the reporters (who will just quote each other until someone corrects them) are confusing the amount of assets being sold with the “deal value,” not realizing that a bunch of liabilities are being transferred along with the assets. Reporters often get the facts confused in complicated deals (which this one is).

For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.

I suspect that the investor group is putting up $1.3 billion in cash to capitalize the new company, then they’re taking on $6.5 billion in deposits, they’ll raise another $2 billion in the wholesale deposit market, and fund the remainder of the assets with FHLB borrowings. That would result in a pretty normal S&L structure. And then they have the loss sharing agreement with the FDIC.

Now, my read could be wrong here. And I’m willing to admit that. But what I know for sure is that we still don’t have enough information on this transaction to know exactly what’s going on here. So, why don’t we heed the following from the FDIC’s website and wait until we have more info: “The transaction is expected to close in late January or early February, at which time full details of the agreement will be provided.” This may be a horrible deal for us taxpayers. But, frankly, until we see the balance sheet and actually understand more about the deal, we simply don’t have enough information to know.

January 2, 2009 at 4:04 PM #323130

davelj
Participant

Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.

Now, part of the problem here is that I THINK the reported “deal value” is not the ACTUAL deal value. From what I can gather, the FDIC is selling ASSETS with a (discounted) value of $13.9 billion (in addition to deposits and branches) to IMB, whereby IMB will put up $1.3 billion in cash in order to capitalize the company. I believe that in this instance the reporters (who will just quote each other until someone corrects them) are confusing the amount of assets being sold with the “deal value,” not realizing that a bunch of liabilities are being transferred along with the assets. Reporters often get the facts confused in complicated deals (which this one is).

For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.

I suspect that the investor group is putting up $1.3 billion in cash to capitalize the new company, then they’re taking on $6.5 billion in deposits, they’ll raise another $2 billion in the wholesale deposit market, and fund the remainder of the assets with FHLB borrowings. That would result in a pretty normal S&L structure. And then they have the loss sharing agreement with the FDIC.

Now, my read could be wrong here. And I’m willing to admit that. But what I know for sure is that we still don’t have enough information on this transaction to know exactly what’s going on here. So, why don’t we heed the following from the FDIC’s website and wait until we have more info: “The transaction is expected to close in late January or early February, at which time full details of the agreement will be provided.” This may be a horrible deal for us taxpayers. But, frankly, until we see the balance sheet and actually understand more about the deal, we simply don’t have enough information to know.

January 2, 2009 at 4:04 PM #323069

davelj
Participant

Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.

Now, part of the problem here is that I THINK the reported “deal value” is not the ACTUAL deal value. From what I can gather, the FDIC is selling ASSETS with a (discounted) value of $13.9 billion (in addition to deposits and branches) to IMB, whereby IMB will put up $1.3 billion in cash in order to capitalize the company. I believe that in this instance the reporters (who will just quote each other until someone corrects them) are confusing the amount of assets being sold with the “deal value,” not realizing that a bunch of liabilities are being transferred along with the assets. Reporters often get the facts confused in complicated deals (which this one is).

For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.

I suspect that the investor group is putting up $1.3 billion in cash to capitalize the new company, then they’re taking on $6.5 billion in deposits, they’ll raise another $2 billion in the wholesale deposit market, and fund the remainder of the assets with FHLB borrowings. That would result in a pretty normal S&L structure. And then they have the loss sharing agreement with the FDIC.

Now, my read could be wrong here. And I’m willing to admit that. But what I know for sure is that we still don’t have enough information on this transaction to know exactly what’s going on here. So, why don’t we heed the following from the FDIC’s website and wait until we have more info: “The transaction is expected to close in late January or early February, at which time full details of the agreement will be provided.” This may be a horrible deal for us taxpayers. But, frankly, until we see the balance sheet and actually understand more about the deal, we simply don’t have enough information to know.

January 2, 2009 at 4:04 PM #322725

davelj
Participant

Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.

Now, part of the problem here is that I THINK the reported “deal value” is not the ACTUAL deal value. From what I can gather, the FDIC is selling ASSETS with a (discounted) value of $13.9 billion (in addition to deposits and branches) to IMB, whereby IMB will put up $1.3 billion in cash in order to capitalize the company. I believe that in this instance the reporters (who will just quote each other until someone corrects them) are confusing the amount of assets being sold with the “deal value,” not realizing that a bunch of liabilities are being transferred along with the assets. Reporters often get the facts confused in complicated deals (which this one is).

For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.

I suspect that the investor group is putting up $1.3 billion in cash to capitalize the new company, then they’re taking on $6.5 billion in deposits, they’ll raise another $2 billion in the wholesale deposit market, and fund the remainder of the assets with FHLB borrowings. That would result in a pretty normal S&L structure. And then they have the loss sharing agreement with the FDIC.

Now, my read could be wrong here. And I’m willing to admit that. But what I know for sure is that we still don’t have enough information on this transaction to know exactly what’s going on here. So, why don’t we heed the following from the FDIC’s website and wait until we have more info: “The transaction is expected to close in late January or early February, at which time full details of the agreement will be provided.” This may be a horrible deal for us taxpayers. But, frankly, until we see the balance sheet and actually understand more about the deal, we simply don’t have enough information to know.

January 2, 2009 at 4:53 PM #323104

TheBreeze
Participant

[quote=davelj]Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.
[/quote]

Yes, I understand that deposits are liabilities. The article states that the ‘deal’ is valued at $13.9 billion — presumably that is net of assets and liabilities. This article clearly states that the sale of “IndyMac” includes the deposits:

Following is the FDIC’s fact sheet on the agreement:

* The transaction is structured as a sale of IndyMac to IMB HoldCo, controlled by IMB Management Holdings, for approximately $13.9 billion

* IndyMac consists of:

– The retail bank headquartered in Pasadena, California, with 33 branches located primarily in the Los Angeles with about $6.5 billion in deposits

http://www.reuters.com/article/americasDealsNews/idUSTRE5014J620090102?pageNumber=1&virtualBrandChannel=0

[quote=davelj]
For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.
[/quote]

It looks to me like the FDIC caused the confusion with their fact sheet. But, if the FDIC and uninsured depositors ate several billion in losses, then couldn’t that raise the value of the bank to $13.9 billion?

In any event, with such a small amount of capital injected and the taxpayers being forced to eat most of the loan losses, it looks like the PE guys are well protected and could make out like bandits (especially if they can sell their loan portfolio to the TARP).

January 2, 2009 at 4:53 PM #323261

TheBreeze
Participant

[quote=davelj]Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.
[/quote]

Yes, I understand that deposits are liabilities. The article states that the ‘deal’ is valued at $13.9 billion — presumably that is net of assets and liabilities. This article clearly states that the sale of “IndyMac” includes the deposits:

Following is the FDIC’s fact sheet on the agreement:

* The transaction is structured as a sale of IndyMac to IMB HoldCo, controlled by IMB Management Holdings, for approximately $13.9 billion

* IndyMac consists of:

– The retail bank headquartered in Pasadena, California, with 33 branches located primarily in the Los Angeles with about $6.5 billion in deposits

http://www.reuters.com/article/americasDealsNews/idUSTRE5014J620090102?pageNumber=1&virtualBrandChannel=0

[quote=davelj]
For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.
[/quote]

It looks to me like the FDIC caused the confusion with their fact sheet. But, if the FDIC and uninsured depositors ate several billion in losses, then couldn’t that raise the value of the bank to $13.9 billion?

In any event, with such a small amount of capital injected and the taxpayers being forced to eat most of the loan losses, it looks like the PE guys are well protected and could make out like bandits (especially if they can sell their loan portfolio to the TARP).

January 2, 2009 at 4:53 PM #323165

TheBreeze
Participant

[quote=davelj]Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.
[/quote]

Yes, I understand that deposits are liabilities. The article states that the ‘deal’ is valued at $13.9 billion — presumably that is net of assets and liabilities. This article clearly states that the sale of “IndyMac” includes the deposits:

Following is the FDIC’s fact sheet on the agreement:

* The transaction is structured as a sale of IndyMac to IMB HoldCo, controlled by IMB Management Holdings, for approximately $13.9 billion

* IndyMac consists of:

– The retail bank headquartered in Pasadena, California, with 33 branches located primarily in the Los Angeles with about $6.5 billion in deposits

http://www.reuters.com/article/americasDealsNews/idUSTRE5014J620090102?pageNumber=1&virtualBrandChannel=0

[quote=davelj]
For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.
[/quote]

It looks to me like the FDIC caused the confusion with their fact sheet. But, if the FDIC and uninsured depositors ate several billion in losses, then couldn’t that raise the value of the bank to $13.9 billion?

In any event, with such a small amount of capital injected and the taxpayers being forced to eat most of the loan losses, it looks like the PE guys are well protected and could make out like bandits (especially if they can sell their loan portfolio to the TARP).

January 2, 2009 at 4:53 PM #323181

TheBreeze
Participant

[quote=davelj]Jesus, Breeze! Slow the hell down. I see you’ve learned absolutely nothing from our prior discussions.

From what I can surmise, the taxpayers are NOT financing “91% of this deal.” You simply don’t know enough about banking to comment intelligently on this stuff. The article clearly states that IMB will be taking on $6.5 billion in deposits in the deal. Deposits are liabilities, Breeze. I thought I cleared that up in a prior post.
[/quote]

Yes, I understand that deposits are liabilities. The article states that the ‘deal’ is valued at $13.9 billion — presumably that is net of assets and liabilities. This article clearly states that the sale of “IndyMac” includes the deposits:

Following is the FDIC’s fact sheet on the agreement:

* The transaction is structured as a sale of IndyMac to IMB HoldCo, controlled by IMB Management Holdings, for approximately $13.9 billion

* IndyMac consists of:

– The retail bank headquartered in Pasadena, California, with 33 branches located primarily in the Los Angeles with about $6.5 billion in deposits

http://www.reuters.com/article/americasDealsNews/idUSTRE5014J620090102?pageNumber=1&virtualBrandChannel=0

[quote=davelj]
For some perspective, IndyMac’s PEAK market cap – back during the Bubble – was just shy of $3 billion. Now does it make any sense whatsoever for an investor group to pay $13.9 billion for a now failed company that previously had a peak value of less than $3 billion as a healthy company? Please. So, I’m pretty sure that the reporters have got something screwed up here and we’ll find out in due time.
[/quote]

It looks to me like the FDIC caused the confusion with their fact sheet. But, if the FDIC and uninsured depositors ate several billion in losses, then couldn’t that raise the value of the bank to $13.9 billion?

In any event, with such a small amount of capital injected and the taxpayers being forced to eat most of the loan losses, it looks like the PE guys are well protected and could make out like bandits (especially if they can sell their loan portfolio to the TARP).
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