[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.
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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
[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.
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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).
