Comments on: BankUnited goes bust and is replaced by BankUnited http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html a finance news and opinion site Sun, 21 Mar 2010 18:21:48 +0000 hourly 1 By: Geithner admits stress tests were an enormous gamble - Credit Writedownshttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-10350 Geithner admits stress tests were an enormous gamble - Credit Writedowns Mon, 08 Mar 2010 22:47:39 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-10350 [...] to private equity concerns or another bank or chop you up into little pieces. This is the IndyMac/BankUnited solution.  Notice that bondholders did not lose any money here…My conclusion from all of this [...] [...] to private equity concerns or another bank or chop you up into little pieces. This is the IndyMac/BankUnited solution.  Notice that bondholders did not lose any money here…My conclusion from all of this [...]

]]> By: JOHNQhttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-8041 JOHNQ Tue, 23 Jun 2009 08:33:00 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-8041 NEW MGMT TEAM AN OWNERS OF BANKUNITED ARE LAUGHING ALL THE WAY TO THE BANK. THEY BOUGHT THE BANK FOR 900 MLLION AND ARE GUARENTEED A RETUEN OF 4.9 BILLION OVER THE NEXT 2 YEARS BY MAXIMIZING THE LOSS SHARRE AGREEMENT, MEANING THEY ARE BETTER OF ALLOWING ABOUT 6 BILLION IN LOANS GO BAD, AND THUS NO INTEREST IN HELPING THE CUSTOMERS. MORE FORECLOSURES, THEY WILL BULK SALE THE PROPERTIES TO THEIR BUDDIES, AND GET RICH DOING IT. WHAT A RIP-OFF, WHAT IS THE FDIC DOING, PVT EQUITY FIRMS SHOULD NOT OWN BANKS. NEW MGMT TEAM AN OWNERS OF BANKUNITED ARE LAUGHING ALL THE WAY TO THE BANK. THEY BOUGHT THE BANK FOR 900 MLLION AND ARE GUARENTEED A RETUEN OF 4.9 BILLION OVER THE NEXT 2 YEARS BY MAXIMIZING THE LOSS SHARRE AGREEMENT, MEANING THEY ARE BETTER OF ALLOWING ABOUT 6 BILLION IN LOANS GO BAD, AND THUS NO INTEREST IN HELPING THE CUSTOMERS. MORE FORECLOSURES, THEY WILL BULK SALE THE PROPERTIES TO THEIR BUDDIES, AND GET RICH DOING IT. WHAT A RIP-OFF, WHAT IS THE FDIC DOING, PVT EQUITY FIRMS SHOULD NOT OWN BANKS.

]]> By: JOHNQhttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5644 JOHNQ Tue, 23 Jun 2009 02:33:00 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5644 NEW MGMT TEAM AN OWNERS OF BANKUNITED ARE LAUGHING ALL THE WAY TO THE BANK. THEY BOUGHT THE BANK FOR 900 MLLION AND ARE GUARENTEED A RETUEN OF 4.9 BILLION OVER THE NEXT 2 YEARS BY MAXIMIZING THE LOSS SHARRE AGREEMENT, MEANING THEY ARE BETTER OF ALLOWING ABOUT 6 BILLION IN LOANS GO BAD, AND THUS NO INTEREST IN HELPING THE CUSTOMERS. MORE FORECLOSURES, THEY WILL BULK SALE THE PROPERTIES TO THEIR BUDDIES, AND GET RICH DOING IT. WHAT A RIP-OFF, WHAT IS THE FDIC DOING, PVT EQUITY FIRMS SHOULD NOT OWN BANKS. NEW MGMT TEAM AN OWNERS OF BANKUNITED ARE LAUGHING ALL THE WAY TO THE BANK. THEY BOUGHT THE BANK FOR 900 MLLION AND ARE GUARENTEED A RETUEN OF 4.9 BILLION OVER THE NEXT 2 YEARS BY MAXIMIZING THE LOSS SHARRE AGREEMENT, MEANING THEY ARE BETTER OF ALLOWING ABOUT 6 BILLION IN LOANS GO BAD, AND THUS NO INTEREST IN HELPING THE CUSTOMERS. MORE FORECLOSURES, THEY WILL BULK SALE THE PROPERTIES TO THEIR BUDDIES, AND GET RICH DOING IT. WHAT A RIP-OFF, WHAT IS THE FDIC DOING, PVT EQUITY FIRMS SHOULD NOT OWN BANKS.

]]> By: JOHNQhttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5570 JOHNQ Tue, 23 Jun 2009 01:33:00 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5570 NEW MGMT TEAM AN OWNERS OF BANKUNITED ARE LAUGHING ALL THE WAY TO THE BANK. THEY BOUGHT THE BANK FOR 900 MLLION AND ARE GUARENTEED A RETUEN OF 4.9 BILLION OVER THE NEXT 2 YEARS BY MAXIMIZING THE LOSS SHARRE AGREEMENT, MEANING THEY ARE BETTER OF ALLOWING ABOUT 6 BILLION IN LOANS GO BAD, AND THUS NO INTEREST IN HELPING THE CUSTOMERS. MORE FORECLOSURES, THEY WILL BULK SALE THE PROPERTIES TO THEIR BUDDIES, AND GET RICH DOING IT. WHAT A RIP-OFF, WHAT IS THE FDIC DOING, PVT EQUITY FIRMS SHOULD NOT OWN BANKS. NEW MGMT TEAM AN OWNERS OF BANKUNITED ARE LAUGHING ALL THE WAY TO THE BANK. THEY BOUGHT THE BANK FOR 900 MLLION AND ARE GUARENTEED A RETUEN OF 4.9 BILLION OVER THE NEXT 2 YEARS BY MAXIMIZING THE LOSS SHARRE AGREEMENT, MEANING THEY ARE BETTER OF ALLOWING ABOUT 6 BILLION IN LOANS GO BAD, AND THUS NO INTEREST IN HELPING THE CUSTOMERS. MORE FORECLOSURES, THEY WILL BULK SALE THE PROPERTIES TO THEIR BUDDIES, AND GET RICH DOING IT. WHAT A RIP-OFF, WHAT IS THE FDIC DOING, PVT EQUITY FIRMS SHOULD NOT OWN BANKS.

]]> By: What the stress tests reveal about Obama’s thinking on banks - Credit Writedownshttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5296 What the stress tests reveal about Obama’s thinking on banks - Credit Writedowns Sat, 23 May 2009 10:40:00 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5296 [...] to private equity concerns or another bank or chop you up into little pieces. This is the IndyMac/BankUnited solution.  Notice that bondholders did not lose any money here.So, the stress tests and the capital [...] [...] to private equity concerns or another bank or chop you up into little pieces. This is the IndyMac/BankUnited solution.  Notice that bondholders did not lose any money here.So, the stress tests and the capital [...]

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5288 Edward Harrison Fri, 22 May 2009 22:29:32 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5288 Rita, the difference between GMAC/Chrysler and this BankUnited transaction is timing: top of the market versus after a considerable bust and bankruptcy. The economics of the deals are vastly different as a result. Rita, the difference between GMAC/Chrysler and this BankUnited transaction is timing: top of the market versus after a considerable bust and bankruptcy. The economics of the deals are vastly different as a result.

]]> By: Ritahttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5287 Rita Fri, 22 May 2009 21:56:44 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5287 I disagree with your conclusion. I think this represents the further deconstruction of America and its financial system. Just take a look at what the vultures over at Cerebus did for GMAC and Chrysler. These acquisitions made by Private Equity firms will be gutted and hollowed out for short term gain and then thrown back to the FDIC and taxpayers in the end. Financial Terrorism for one and all I disagree with your conclusion. I think this represents the further deconstruction of America and its financial system. Just take a look at what the vultures over at Cerebus did for GMAC and Chrysler. These acquisitions made by Private Equity firms will be gutted and hollowed out for short term gain and then thrown back to the FDIC and taxpayers in the end. Financial Terrorism for one and all

]]> By: Edward Harrisonhttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5274 Edward Harrison Fri, 22 May 2009 07:49:56 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5274 Tom, I like your interpretation of the use of the monies. I saw the dust-up over Shinsei. That has left the Japanese with a fairly bad taste in their mouths regarding American style capitalism.<br><br>You should also note that the $5 billion loss and the subsequent acquisition under the same name could be seen as a hidden subsidy. It is as if the private equity guys just received BankUnited free and clear minus a $4.9 billion hit taken by taxpayers. Nothing else has changed at the company except top level management.<br><br>I am surprised no one has picked up on this. Tom, I like your interpretation of the use of the monies. I saw the dust-up over Shinsei. That has left the Japanese with a fairly bad taste in their mouths regarding American style capitalism.

You should also note that the $5 billion loss and the subsequent acquisition under the same name could be seen as a hidden subsidy. It is as if the private equity guys just received BankUnited free and clear minus a $4.9 billion hit taken by taxpayers. Nothing else has changed at the company except top level management.

I am surprised no one has picked up on this.

]]> By: Tom Lindmarkhttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5270 Tom Lindmark Fri, 22 May 2009 02:12:50 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5270 Ed,<br><br>There are a lot of things to be concerned about in this transaction. If you look at the manner in which the acquiring companies bought the company you will note that it is artfully arranged to stay below the 25% bogey that would subject them to regulation by the Fed. The Fed has said that these sorts of structures an artifice.<br><br>You may be correct in your assumption that they plan to hold and sell in a few years. They may, however, have other designs. The idea that private equity firms have access to what amounts to their own piggy bank with which to fund deals.<br><br>You might want to review John Hempton's post on the J.C. Flowers acquisition of a Japanese bank. Here is the link <a href="http://brontecapital.blogspot.com/2009/05/christopher-flowers-short-memory.html" rel="nofollow">http://brontecapital.blogspot.com/2009/05/chris...</a><br><br>Personally, I think that the FDIC jumped the gun entirely in this case. I believe there were other bids including one from Toronto Dominion. I think it would be worthwhile to see the details of all of the bids and to hear an explanation from the FDIC as to why they chose to sell to private equity as opposed to another financial institution (the generally preferred option). I also think that there ought to be a very deep policy discussion about commercial companies owning banks.<br><br>Isn't it amazing how quickly so many have gone to arguing in favor of nationalization and downsizing the banks to barely blinking when the most agressive part of the financial system acquires a bank? Ed,

There are a lot of things to be concerned about in this transaction. If you look at the manner in which the acquiring companies bought the company you will note that it is artfully arranged to stay below the 25% bogey that would subject them to regulation by the Fed. The Fed has said that these sorts of structures an artifice.

You may be correct in your assumption that they plan to hold and sell in a few years. They may, however, have other designs. The idea that private equity firms have access to what amounts to their own piggy bank with which to fund deals.

You might want to review John Hempton's post on the J.C. Flowers acquisition of a Japanese bank. Here is the link http://brontecapital.blogspot.com/2009/05/chris...

Personally, I think that the FDIC jumped the gun entirely in this case. I believe there were other bids including one from Toronto Dominion. I think it would be worthwhile to see the details of all of the bids and to hear an explanation from the FDIC as to why they chose to sell to private equity as opposed to another financial institution (the generally preferred option). I also think that there ought to be a very deep policy discussion about commercial companies owning banks.

Isn't it amazing how quickly so many have gone to arguing in favor of nationalization and downsizing the banks to barely blinking when the most agressive part of the financial system acquires a bank?

]]> By: Manshuhttp://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5268 Manshu Fri, 22 May 2009 00:40:30 +0000 http://www.creditwritedowns.com/2009/05/bankunited-goes-bust-and-is-replaced-by-bankunited.html#comment-5268 Very interesting, so the coming of private money shows that there is no more need for PPIP, TALF and such? Very interesting, so the coming of private money shows that there is no more need for PPIP, TALF and such?

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