WaMu to Close Home Loan Offices
Sunday, April 20, 2008
Seattle, Washington-based Washington Mutual, Inc., has announced plans to raise capital by allowing TPG Capital (TPG) and other investors to acquire $7 billion in WaMu equity securities and by closing the company's freestanding home loan offices.
In a statement about the transaction, WaMu added that TPG will acquire $2 billion in newly-issued securities, allowing the company to maintain the capital ratios needed to grapple with losses related to the company's home loan portfolios over the next two years.
In addition, WaMu's plan to provide capital security includes an executive decision to exit the wholesale lending business and an initiative to invest in retail bank branches and call center production, the company said in a statement. David Bonderman, a founding partner of TPG, has been appointed to WaMu's Board, and former Continental Airlines chairman and chief executive officer Larry Kellner will serve as a Board observer.
Along with TPG, WaMu says other investors are purchasing securities, including some of the company's notable institutional shareholders.
“We're very pleased that TPG and these major investors have expressed their confidence in WaMu's underlying value and its growth potential,” said chairman and chief executive officer Kerry Killinger. “This substantial new capital – along with the other steps we are announcing today – will position us for a return to profitability as these elevated credit costs subside. With the support of these investors, we have every confidence in our ability to deal with today's market conditions and restore shareholder value.”
In a statement about the transaction, WaMu added that TPG will acquire $2 billion in newly-issued securities, allowing the company to maintain the capital ratios needed to grapple with losses related to the company's home loan portfolios over the next two years.
In addition, WaMu's plan to provide capital security includes an executive decision to exit the wholesale lending business and an initiative to invest in retail bank branches and call center production, the company said in a statement. David Bonderman, a founding partner of TPG, has been appointed to WaMu's Board, and former Continental Airlines chairman and chief executive officer Larry Kellner will serve as a Board observer.
Along with TPG, WaMu says other investors are purchasing securities, including some of the company's notable institutional shareholders.
“We're very pleased that TPG and these major investors have expressed their confidence in WaMu's underlying value and its growth potential,” said chairman and chief executive officer Kerry Killinger. “This substantial new capital – along with the other steps we are announcing today – will position us for a return to profitability as these elevated credit costs subside. With the support of these investors, we have every confidence in our ability to deal with today's market conditions and restore shareholder value.”
