It looks to me like the FDIC caused the confusion with their fact sheet. But, if the FDIC 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, 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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I agree. That fact sheet is confusing. I’m 99.9% sure that FDIC is not using “deal value” in its generally accepted manner (maybe they’re doing a little “marketing” themselves?). The numbers on the term sheet don’t all add up or balance. We’ll know exactly what the balance sheet looks like when IMB has to file its Call Report for the quarter ended March 31, 2009 (by April 15). Then we’ll know exactly what the deal is.
On the surface it looks like IMB is reasonably well protected and I’m sure they wouldn’t do the deal if they didn’t THINK they were going to make out like bandits. Of course, TPG and its co-investors also thought they were going to make out like bandits in the WaMu deal. That worked out well for them.
I think we’ll see a wide variety of outcomes in this crisis. But I know that many billions were made by investors during the S&L crisis both in buying assets from the RTC and in recapitalzing banks. Ron Perlman, Nicholas Brady, Gerald (not former president) Ford, Mike Kelly… it’s a long list.
