Low and heavy

22 May 2009 By Robert Cyran Follow @rob_cyran

The consortium buying Florida s BankUnited will receive $12.7bn in troubled assets for a cash outlay of just $900m. The FDIC will assume much of any resulting losses. The deposit insurance agency s fiscal straits and heavy workload are forcing it to conduct fire sales.

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The Federal Deposit Insurance Corporation seized BankUnited and sold it to a private equity consortium. The Florida thrift had $12.8bn of assets and deposits of $8.6bn on May 2. The new BankUnited will assume $12.7bn in assets and $8.3bn in nonbrokered deposits. It has 85 branches. The FDIC's loss will be $4.9bn.

The consortium will recapitalize the institution with $900m in new capital. The FDIC and BankUnited entered into a losssharing transaction and will share in the losses on approximately $10.7bn in assets.

The bank will be led by a management team fronted by John Kanas. The consortium consists of: WL Ross; Carlyle; Blackstone; Centerbridge; the LeFrak Organization; The Wellcome Trust; Greenaap Investments; and East Rock Endowment Fund. No partner will exceed a 24.9% stake.

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