WaMu bailout terms outlined (WM, GS, LEH)
The company is raising a total of $7 billion via direct stock sales to an investment vehicle managed by TPG Capital, which includes other top institutional holders.
While this financing pact is great in that it provides needed liquidity, the share placement price is essentially at the low of the stock since the malaise began. The company has also slashed its dividend down to $0.01 and outlined details of its losses.
TPG as the anchor will buy $2 billion in newly issued securities. WaMu is issuing 176 million shares at $8.75 and 55,000 contingently convertible perpetual non-cumulative preferred stock at a purchase price and liquidation preference of $100,000.00 per share with an exercise price of $8.75 per share.
This financing package is more similar to an old fashioned rights offering that is at a deep discount and highly dilutive. You can read the full story from 247WallSt.com..
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