Austin Kilgore | 01.05.09
Billionaire George Soros and Dell Inc. founder Michael Dell are part of a seven-member investor consortium that will purchase IndyMac Bank for $13.9 billion, according to an Associated Press report.
The report said the investors have formed a partnership called IMB Management Holdings LP, that includes MSD Capital, Dell’s investment firm, private equity firm Dune Capital Management, J.C. Flowers & Co., Paulson & Co., Soros’ Fund Management, and a fund controlled by Silar Advisors LP, all of New York City, and Stone Point Capital of Greenwich, Conneticut.
“We have assembled a group of experienced private investors in financial services to acquire the former IndyMac and operate it under new management with extensive banking experience,” Dune Capital Management co-CEO Steven Mnuchin said in a statement. “We will inject significant private capital into IndyMac so that it can once again effectively serve its customers and communities.”
Once the deal closes, the investment group will pour $1.3 billion in new capital into IndyMac and continue to operate the Pasadena, California-based bank, the Federal Deposit Insurance Corporation told the AP.
Under terms of the sale, the new investors will shoulder the first 20 percent of the bank’s loan losses, with the FDIC agreeing to take on the majority of any losses thereafter, according to the report, which added the FDIC said its bank insurance fund stands to lose $8.5 billion to $9.4 billion on IndyMac.
The IndyMac investors will continue the home-loan modification program that FDIC Chairman Sheila Bair launced in August.
The government seized IndyMac in July as the U.S. Housing market began collapsing. IndyMac was one of the greatest casualties of the fallout because of the number of mortgages it distributed with little down payment or proof of assets.
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Tags: Indymac, FDIC, subprime, mortgage, real estate, loan
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