In an underwriting completed January 22, the FDIC sold its
14 million shares of Washington Mutual Inc. stock for $47.50 a
share, or $665 million.
The FDIC received the stock on December 20 in exchange
for warrants the agency held in N.A. Capital Holdings, parent
company of the American Savings Bank, F.A., Irvine, California.
Washington Mutual, a Seattle-based thrift holding company,
acquired Keystone Holdings Inc., parent of N.A. Capital Holdings,
on that same date.
Proceeds from the underwriting will go to the FSLIC
Resolution Fund (FRF) and will reduce the cost of one of the
largest thrift failures on record.
The price obtained this week represents a substantial
increase over the $30 a share the stock would have brought on July
22, when the FDIC agreed to exchange its warrants for stock.
The Federal Savings and Loan Insurance Corporation
(FSLIC) received an interest in N.A. Capital Holdings following
the failure of American Savings in December 1988. In May 1996,
the FDIC was approached by Keystone to restructure its warrant
agreement in N.A. Capital Holdings.
Merrill Lynch, Pierce, Fenner & Smith, Inc. and Friedman,
Billings, Ramsey & Co., Inc. acted as underwriters for the FDIC on
the sale of the shares.
Congress created the Federal Deposit Insurance Corporation in 1933 to
restore public confidence in the nation's banking system. The FDIC
insures deposits at the nation's 11,547 banks and savings associations
and it promotes the safety and soundness of these institutions by
identifying, monitoring and addressing risks to which they are exposed.
FDIC press releases and other information are available on the Internet
via the World Wide Web at www.fdic.gov or through Gopher at
gopher.fdic.gov.
