Washington Mutual did it, raising $7 b in capital($2 b more than had been discussed yesterday).
TPG will purchase $2 b in newly issued securities. They also sold 176 m shares of common at $8.75 a share (closed at $13.15 yesterday), and issued $5.5 b in convertible preferred securities, along with warrants. Slashing quarterly dividend to $0.01 a share.
The good news: this makes it much more likely the company will survive.
The bad news: disastrous for shareholders, not only is it dilutive (100 percent!) but the terms were weaker than expected.
However, traders have noted to me that WM was not negotiating from a position of strength. This may be a negative for National City --the self proclaimed weak link in the financial chain.
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