Blackstone, Centerbridge, Carlyle, and WLRoss Wins Auction
June 30th, 2009
Major shareholders Blackstone, WLRoss, Carlyle, and Centerbridge, just won BankUnited in an auction after federal regulators closed the Florida lender. The BankUnited closure is one of the United States’ largest bank losses in 2009. Handled by the Federal Deposit Insurance Corporation, the auction was only second of the many US bank failures during the crisis.
A deficit-sharing arrangement on $10.7 billion of the $12.8 billion bank assets is included in the BankUnited transaction. Those who are in-the-know about the transaction said that the government will acquire 80% of the primary $4 billion in losses as well as 95% of further losses. In exchange for this, warrants will be given to the federal administration and this will provide them with a portion in case of any coming upside.
New shareholders will supply a fresh equity of $900 million in the bank, increasing its common ownership interest to 8 per cent of assets. This is enough to perform purchases.
New York’s former New Fork bank chief executive, John Kansas, will head the biggest independent Florida-based bank, the new BankUnited.
The shareholder group, composed of Carlyle, Blackstone, WLRoss, and Centerbridge private equity firms, established meetings with regulators for nearly four months. During those times, markets were at a decline, which forced regulators to act slowly while hoping for improvement.