FACTBOX-Terms of the FDIC's IndyMac sale agreement
Jan 2 (Reuters) - The Federal Deposit Insurance Corp said on Friday it agreed to sell the assets of failed mortgage lender IndyMac to a consortium of private equity and hedge fund firms, including Dune Capital Management and J.C. Flowers & Co, for $13.9 billion.
The private equity group called IMB HoldCo will put up $1.3 billion in cash to capitalize IndyMac, and the FDIC has agreed to share losses on a portfolio of loans.
The group buying IndyMac is led by Steve Mnuchin, the chairman of Dune Capital and a former Goldman Sachs executive, buyout artist Christopher Flowers, and hedge fund operator John Paulson, who gained billions of dollars betting against the U.S. housing market.
Following is the FDIC's fact sheet on the agreement:
* The transaction is structured as a sale of IndyMac to IMB HoldCo, controlled by IMB Management Holdings, for approximately $13.9 billion
* IndyMac consists of:
- The retail bank headquartered in Pasadena, California, with 33 branches located primarily in the Los Angeles with about $6.5 billion in deposits
- A loan portfolio of $16 billion and a securities portfolio of $6.9 billion
- A servicing platform with mortgage servicing rights (MSRs) representing an unpaid principal balance of $157.7 billion
- A reverse mortgage platform, Financial Freedom, with $1.5 billion of reverse mortgages and MSRs representing an unpaid principal balance of $20.2 billion
* Uninsured depositors will not be receiving an additional claims dividend at this time
* The FDIC has agreed to share losses on a portfolio of qualifying loans with IndyMac assuming the first 20 percent of losses after which the FDIC will share losses 80/20 for the next 10 percent of losses and 95/5 thereafter
* IMB HoldCo will continue the FDIC's existing loan modification program
* Under a participation structure on an approximately $2 billion portfolio of construction and other loans, the FDIC will receive a majority of all cash flows generated
* The FDIC has agreed to continue to provide secured financing on transferred assets to IndyMac
* When the transaction is closed, IMB HoldCo will capitalize IndyMac with about $1.3 billion in cash
* The transaction is expected to close in the first quarter of 2009
* Barclays Capital and Deutsche Bank Securities served as financial advisers to the FDIC (Reporting by Karey Wutkowski, editing by Leslie Gevirtz)
