BankUnited Deal, FDIC NYTimes

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October 26, 2010, 5:54 amI.P.O./Offerings

Silver Lining for F.D.I.C. in BankUnited Deal

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From Reuters Breakingviews:

At first blush, the anticipated initial public offering ofBankUnited looks like a deal that could leave Sheila C.

Bair, the chairwoman of the Federal Deposit Insurance Corporation, red in the face. After all, she sold the bank,

with $13 billion of assets, to a group ofprivate equity heavy-hitters in May 2009 for a song. While its not yet

clear how much those investors will make, any profit will sound indecent next to the F.D.I.C.s projected losses

on the deal.

But Ms. Bair need not be embarrassed. As one of the first big rescue operations of the banking crisis, the

BankUnited deal served to pique investor interest in the banking sector. That arguably helped to reduce overall

losses to the insurance fund, whose ultimate backstop is the American taxpayer.

True, it is not going to look pretty for the F.D.I.C. when BankUnited goes public, which it can do from late next

month under the deal it brokered 18 months ago. Investors including Carlyle, Blackstone and Wilbur Ross

plugged $900 million of new capital into the bank. That equity is almost certain to be worth a multiple of what

they paid.

12/6/2010 Silver Lining for F.D.I.C. in BankUnited

nytimes.com//silver-lining-in-f-d-i- 2/


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Alan

San Angelo, TXOctober 27th, 2010

1:20 pm

BankUnited's John Kanas predicted 3,000 banks would fail in the next few years. The FDIC's $4.9 billion FDIC

subsidy instantly turned BankUnited into one of the best capitalized banks in the country.

Government support enabled BankUnited to leapfrog its competition. Now it wants to invade New York. First

bedbugs, now BankUnited.

I can't wait for the S-1 to see how much cash (from the $500 million IPO proceeds) is returned to investors.

Recommend Recommended by 0 Readers

2.

Alan

San Angelo, TX

November 1st, 2010

12:31 pm

IPO is down to $300 million per news reports. The S-1 reveals investors got $2.3 billion in cash from the FDIC.

They put up $945 million. For putting up two-thirds of the capitalization, the FDIC got warrants for 10% of

stock. The bid from Carlyle Group, Blackstone, Wilbur Ross and Centerbridge wasn't even the highest. They

bled BU for a $20 million transaction fee and for $20 million more in dividends.

Investors plan to take some of the IPO proceeds but the S-1 only said proceeds would be used for business

purposes. Way to go Sheila Bair.

Recommend Recommended by 0 Readers

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