IndyMac Assets to Be Bought by Private Group: FDIC

A consortium of private equity and hedge fund firms, including J.C. Flowers and Dune Capital Management, has agreed to buy the assets of failed mortgage lender IndyMac, the Federal Deposit Insurance said Friday.

The FDIC said it is selling the assets of IndyMac, which has been run by the agency since the lender failed in July, to IMB HoldCo in a deal valued at about $13.9 billion.

The group buying IndyMac includes buyout artist Christopher Flowers, hedge fund operator John Paulson, who gained billions of dollars betting against the U.S. housing market, and Steve Mnuchin, the chairman of Dune Capital and a former Goldman Sachs executive.

Affiliates of billionaire investor George Soros and Michael Dell, the chief executive of computer maker Dell , are also involved with the consortium buying IndyMac.

The purchase will include IndyMac's 33 branches with about $6.5 billion in deposits, as well as a loan portfolio and securities portfolio worth about $22.9 billion. IMB HoldCo is also buying a loan servicing portfolio worth more than $175 billion.

Terry Laughlin, who previously headed Merrill Lynch Bank & Trust, will serve as chief executive of IndyMac.

The mortgage specialist's IndyMac Bank unit was taken over by regulators after it failed on July 11, making it one of the largest bank failures in U.S. history. At the time, it had $32 billion in assets and $19 billion in deposits.

IndyMac was the ninth-largest U.S. mortgage lender in 2007, according to the newsletter Inside Mortgage Finance.

IMB HoldCo agreed to capitalize IndyMac with about $1.3 billion in cash when the transaction closes, which is expected to happen in late January or early February, the FDIC said.

The FDIC entered into a loss share agreement with IMB HoldCo on the deal. IndyMac will assume the first 20 percent of losses on a portfolio of qualifying loans, after which the FDIC will assume 80 percent on the next 10 percent of losses, and 95 percent on losses thereafter.

The deal is expected to cost the FDIC's insurance fund between $8.5 billion and $9.4 billion, in line with previous estimates.

The Office of Thrift Supervision said Friday that it has granted preliminary clearance to IMB HoldCo's application to operate IndyMac as a federal savings association under OTS's supervision.

Copyright 2009 Reuters. Click for restrictions.