Goldman (Rothschild boys) connection buys INDY MAC

Lots of Goldman involved in this deal - new to me is Michael Dell in this circle - but more amazingly I have no clue what they are after since Indy Mac is a mortgage bank and I do not see the point other than people might want to have the advantage of '0' financing .The government will cover part of the losses but no details on that so far. Its a weird deal as they pay 13.2 bil. to start with but get some loss voverage on the other. In my book the deal makes no sense at all but they must have a hiiden agenda which will show over time.

Mnuchin Leads Private-Equity Funds to Buy Failed IndyMac Bank

By Zachary R. Mider and Ian Katz

Jan. 3 (Bloomberg) -- Private-equity investors led by Steven Mnuchin, a former Goldman Sachs Group Inc. executive, agreed to buy IndyMac Bank from the Federal Deposit Insurance Corp. and inject $1.3 billion in cash, a rare purchase of a failed financial institution by non-bank buyers.

The sale to a group of firms run by ex-Goldman bankers as well as hedge-fund managers John Paulson and George Soros was the least costly option, the FDIC said in a statement yesterday. The FDIC agreed to share losses with the group on a pool of IndyMac loans.

The FDIC, which seized the Pasadena, California-based institution in July after a bank run, was forced to open bidding to non-bank investors after failing to find a buyer among the lender’s stronger rivals. The current market for selling assets is “challenging,” the agency said in the statement. Regulators closed 25 banks last year.

“I am not impressed with the amount of capital being put in,” Bert Ely, chief executive officer of Ely & Co. Inc., a financial institutions consultant in Alexandria, Virginia, said in an interview after the announcement. “Why didn’t any bank buy it? IndyMac doesn’t strike me as a very viable bank.”

The investor group and the FDIC signed a letter of intent for the transaction, which the agency said in a fact sheet was valued at about $13.9 billion. The investors will inject about $1.3 billion in cash into the new company when the deal closes, later this month or in early February, the agency said.

Mnuchin Becomes CEO

The FDIC agreed to share some losses on a portfolio of loans, with the new company assuming the first 20 percent, the agency said.

FDIC spokesman David Barr declined to comment beyond the statement.

Mnuchin, 46, a former Goldman Sachs executive vice president, will be chairman and chief executive officer of a new holding company to run IndyMac, the FDIC said. Mnuchin founded Dune Capital Management LP with former colleagues from Goldman Sachs, David Neidich and Chip Seelig, after a stint at billionaire Soros’ hedge fund. Dune’s investments included stakes in Viacom Inc.’s DreamWorks LLC film library, and the 802-room Hyatt Regency hotel in San Francisco.

“We will inject significant private capital into IndyMac so that it can once again effectively serve its customers and communities,” Mnuchin said in a statement yesterday.

The FDIC has since 1991 infrequently sold failed institutions to buyers without a bank affiliation. In 1993, it sold shares in Brooklyn-based CrossLand Federal Savings Bank to institutional investors in an initial public offering that raised $332 million. Two years earlier, the FDIC’s sale of Boston’s failed Bank of New England to Fleet/Norstar Financial Group involved a $283 million minority investment by Kohlberg Kravis Roberts & Co., the New York-based private equity firm.

Flowers, Stone Point

Several other IndyMac investors have connections to Mnuchin through Goldman, the New York-based investment bank. J.C. Flowers is run by former Goldman banker J. Christopher Flowers; Stone Point Capital’s chairman is Stephen Friedman, Goldman’s former managing partner; and Silar Advisors LP was founded by Robert Leeds who used to trade mortgage bonds at Goldman.

Flowers, 51, specializes in investing in banks, insurance companies, and other financial firms. One of his previous bank investments, in Japan, has been hailed by David Rubenstein, co- founder of the Carlyle Group buyout firm, as perhaps the most successful private equity deal in history.

Flowers bought the Long-Term Credit Bank of Japan Ltd. for 121 billion yen ($1.1 billion) in 2000, renaming it Shinsei. The group sold two-thirds of the company in 2004 for 532 billion yen.

Paulson, Soros

The buyers also include Paulson, the hedge-fund manager whose bet against the U.S. housing market helped earn him an estimated $3.7 billion in 2007, and a fund controlled by Soros. MSD Capital LP, a fund that manages money for Michael Dell, the founder and CEO of personal-computer maker Dell Inc., also is investing.

The deal could still fall through, Ely said. “Usually when the FDIC announces a deal, it’s a done deal,” he said. “This is a letter of intent.”

The FDIC seized IndyMac after unpaid mortgages left the lender short of cash, triggering a run by depositors that drained $1.3 billion in the 11 days before the July 11 takeover. The bank was among 25 to collapse, the highest toll since 1993.

IndyMac’s failure will cost the deposit insurance fund, which is financed by fees paid by banks, about $8.5 billion to $9.4 billion, the agency said. The agency insures deposits at 8,384 institutions with $13.6 trillion of assets.