Washington Mutual demanda a la FDIC por 17 billones US$ + daños

¡Feliz Año 2015!

"This is an outstanding academic treatment of the investments made by KKR, all of which were some kind of leveraged buy-out. The authors focus their attention on the transactions themselves, not the way they were viewed by society or on the people that put them together - in this regard the book is a rare gem. It treats the period up to 1990 in some depth, with some very interesting case studies that show pretty good financial detail with outstanding qualitative descriptions of the transactions that were put together. As you walk through the various case studies, you are able to sit alongside with the KKR team and watch as the LBO goes from an unusual financial instrument to a mainstream product that is widely accepted in the marketplace. While growing acceptance of financial products is an established facet of Wall Street, to follow this evolution through the work of a single firm really is quite interesting. The manner in which the complexity, leverage and size of the transactions grow is laid out in plain English, making this a fascinating read."

http://www.amazon.com/The-New-Financial-Capitalists-Corporate/dp/0521642604/ref=cm_cr_pr_product_top

"The partnership between Fleet and KKR had mutual benefits. Fleet needed the capital
provided by KKR to qualify for the right to bid. KKR, however, was unable to bid for
a banking entity on its own, because of the provisions of the Bank Holding Company Act
that limited ownership of a bank by nonbank institutions to less than 25 percent.28 In the
bid for the bridge banks, KKR assumed a passive role in the transaction. The bid for the
bridge banks also marked the first time since the Great Depression that a nonbank investor
participated in the acquisition of a failed commercial bank."

________________________

Per the book authored by George P. Baker & George David Smith, published in 1998, "The New Financial Capitalists: Kohlberg Kravis Roberts and the Creation of Corporate Value"

Page 199:

"The acquisition of BNE [Bank of New England] was to be financed almost wholly with equity, including $283 million from KKR for a half stake in the equity of BNE, the other half of which would be held by Fleet, which would then assume full responsibility for managing BNE's assets. KKR would not put any of its partners on Fleet's board of directors. KKR expected (it turned out to be true) that this arrangement would shield its investments in BNE from regulatory opposition.

Yet how, under these circumstances, could KKR exercise any effective monitoring function? KKR had a great deal of faith in Terence Murray [CEO of Fleet Banking Group], but it was not about to become a merely passive investor. To ensure that Fleet would continue to act in KKR's interests, the firm structured its Fund's equity holdings in the form of a "dual convertible preferred stock," a novel security that gave KKR the option ultimately to convert its holdings either into shares of the parent (Fleet) or of the subsidiary (BNE). Fleet's management would thus have a clear incentive to focus its efforts on improving BNE, while KKR would benefit from its right to transparent, unconsolidated financial reports on the subsidiary's progress."

With the BNE acquisition, KKR showed just how far it was prepared to go to expand its investment horizons. In this instance, the firm proved willing not only to forgo leverage to effect a buyout, but also to pursue an opportunity under terms that were extremely unorthodox by its own standards, yet only so long as it could substantially influence what happened after the deal was closed. As matters moved ahead, KKR helped Fleet acquire additional banking properties in Massachusetts, New York, and New Jersey; by 1997, it had recorded a nearly 35 percent annually compounded return on its investment."

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An article published on January 03, 1996 titled "Kohlberg Kravis in Swap for 7.5% of Fleet":

"The Fleet Financial Group said today that the investment firm of Kohlberg Kravis Roberts & Company had exchanged its preferred stock holdings in Fleet for 19.9 million shares of common stock, giving it a 7.5 percent stake in the financial services concern.

Fleet Financial, an $84 billion diversified financial services company based in Boston, said Kohlberg Kravis holds the rights to buy another 6.5 million shares of Fleet's common stock.

Kohlberg Kravis, which completed the swap on Sunday, obtained the dual convertible preferred stock and the rights to buy common stock in return for its provision of capital for Fleet's 1991 purchase of the Bank of New England."

Per the following link regarding Fleet : http://en.wikipedia.org/wiki/FleetBoston_Financial

"In 1996 Fleet acquired the US branch network (in New York and New Jersey) of the British National Westminster Bank.

In 1998 Fleet acquired Quick & Reilly discount brokerage and their deep-discount, online subsidiary Suretrade.[2]

Fleet's biggest merger came in 1999, when it acquired BankBoston (which was itself the fruit of a 1996 merger between Bank of Boston and BayBank). The new FleetBoston was the culmination of a series of Boston-area bank mergers that combined several smaller banks into a single large institution. FleetBoston was the seventh-largest bank in the United States, as measured by assets (US$197 billion in 2003). It had almost 50,000 employees, over 20 million customers worldwide and revenues of $12 billion per year. The banking subsidiary operated under the Fleet name, using BankBoston's stylized eagle logo."

___________________

Conclusions...IMO:

Comparisons of the KKR 1991 Bank of New England Deal (BNE) vs potential WMIH Deal

KKR's 1991 BNE Deal WMIH

Assets of Target $22.0 billion (FDIC Receivership) unknown

Partners Fleet et al. Citibank, KKR, AAOC

Capitalization $683 million $600 million Preferred B @ 3%

KKR's investment $283 million dual conv. shares $11 million (Jan. 31, 2014) pref. A
conv. shares
$400 million (Jan. 05, 2015) pref. B
conv. shares

KKR's stake 50% 42.5% (after pref. A converted)

?? additional percentage stake after
pref. B are converted

ROI 1996 KKR converted to 7.5% stake of Fleet future unknown

Ultimate Conclusions...IMO:

1) If KKR kept at least their 7.5% stake of Fleet shares from 1996 to the end of 2003 when FleetBoston had an asset value of $197 billion, the value of KKR stake would be ($197 billion x 7.5% = $14.775 billion). If KKR sold shortly after the 1996 date, then Fleet had assets valued at $84 billion. Therefore the KKR stake would be ($84 billion x 7.5% = $6.3 billion).

2) In the 1991 KKR/Fleet Bank of New England deal, KKR did not have any of their board members on the BOD. While in upon the consummation of the Jan. 05, 2015 Pref. B share private offering, KKR will install 2 new members to the WMIH BOD. Those two members are from Capmark (formally GMAC Financial). Eugene Davis, WMIH Board member, is also the Chairman for Capmark. Therefore, there will be plenty of board members that have banking/financial institution experience. KKR would probably have the majority influence of any stakeholder.

3) The 1991 Bank of New England deal was a seized banking institution which had $22 billion in assets, and KKR/Fleet won the bid for $683 million. IMO, WMIH might potentially be acquiring a failed bank from the FDIC, so they can fully optimize their capitalization of about $600 million.

http://finance.yahoo.com/news/wmi-holdings-announces-completion-private-210500783.html

Fin del Capitulo BK
Fin del Capitulo No Valemos Nada
Inicio Capitulo "Vamos a por la primera M&A"

Feliz noche de Reyes...La constancia tiene premio para los valientes!

Las nuevas 600,000 Preferentes WMIHP
US92936P2092 - WMIHP

Nuestros Partners: KKR y Citigroup

Tagar Olson, Member and Head of KKR's Financial Services team, stated, "We are pleased to participate in the offering and invest additional capital in WMI Holdings, as we continue to see opportunities for the Company to grow and diversify its platform. Having partnered with the Company for over a year, we believe that WMI Holdings is well positioned as an acquiror and we believe it is capable of leveraging its resources to drive value as it executes on its acquisition strategy."

http://www.marketwatch.com/investing/stock/wmihp

Ahora a ver con que primera adquisición nos sorprenden para que el valor coja forma.

Felices Reyes

http://www.sec.gov/Archives/edgar/data/933136/000110465915001040/0001104659-15-001040-index.htm
http://www.sec.gov/Archives/edgar/data/933136/000110465915001042/0001104659-15-001042-index.htm
http://www.sec.gov/Archives/edgar/data/933136/000110465915001045/0001104659-15-001045-index.htm

KKR desde las Islas Cayman :) 13 D

HENRY KRAVIS OFFICIALLY 10% OWNER IN WMIH

Gurus... ¿se os ha comido la lengua el gato? :) :) :)

KKR adquiere 71 Millones de acciones, de esta manera desde las Islas Cayman

Owner Filings Transaction Date Type of Owner
KRAVIS HENRY R 0001081714 2015-01-05 10 percent owner
ROBERTS GEORGE R 0001081715 2015-01-05 10 percent owner
KKR & Co. L.P. 0001404912 2015-01-05 10 percent owner
KKR Management LLC 0001472694 2015-01-05 10 percent owner
KKR Group Ltd 0001472695 2015-01-05 10 percent owner
KKR Group Holdings L.P. 0001472696 2015-01-05 10 percent owner
KKR Fund Holdings GP Ltd 0001472697 2015-01-05 10 percent owner
KKR Fund Holdings L.P. 0001472698 2015-01-05 10 percent owner

No Hay que ser muy listos para darse cuenta que si un Billonario está entrando es porque piensa generar unos retornos de x3 a x5 de su inversión.

CORPORATE VALUE OF "NEW" WMIH

From the 8Ks, we were informed that KKR's voting power would turn to be 20.7% in per-exercise of its warrants and after Class B issuance. So far KKR has invested $210MM in WMIH. $10MM was for Class A and $200MM for Class B.

The derived "NEW" WMIH corporate value would be $1,014,492,753.62.
Class B provides $598,000,000. Intuitively, the derived "OLD/NOW" WMIH should be $416,492,753.62. Current outstanding shares are 202,343,245. Moreover, the price used in these calculations is $2.0583.

Mathematically, $2.0583 is the price assigned to the current WMIH.

Pre-Warrant
KKR has contributed at least 20.55% to the SHIFT.
Citi keeps the remaining and contributes 11.66% to the SHIFT.
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There are two groups I would like to explain a bit. They are PUBLIC GROUP and OTHER HOLDERs.

PUBLIC GROUP
The new institution holders provide an increase of 23.75% to the SHIFT. However, in a comprehensive effect, Public Group experienced a % decrease due to CLASS B DILUTION in corporate value. The final SHIFT for Public Group is -8%. Therefore, 23.75% has been fully absorbed and digested.

OTHER HOLDERs
Before Class A and Class B, Other Holders were having around 45% interest of the CO. After Class B, they would push 22.14% towards the SHIFT. However, because the lowest % in the testing period was 22.14%, their contributing portion, again, gets netted zero.
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THEREFORE, THE FINAL SHIFT ON OWNERSHIP TOTAL, IN ACCORDANCE TO MY FINGERS, IS 32.22%. EVEN WITH FURTHER INCLUSION OF KKR WARRANTS, THE % RISES TO 39.68%.

Esperemos que tras la operación usemos deuda como instrumento.

Maxi & Besugo... venga chicos animad esto un poco que quiero escucharos a ver como aclarais lo que va a ocurrir.

El Duo Dinamico está very quiet jejejejeje

PD: Os paso un video de nuestro amigo Henry Kravis dueño de 71 millones de acciones WMIH...inventor del LBO.
Leverage Buyouts. RJR Nabisco la compra más cara de 1988 por $31.400 Millones.

https://www.youtube.com/watch?v=OtKizreanP0

http://en.wikipedia.org/wiki/Henry_Kravis