Skip to content
Info Provider
Breaking News
منتخب حکومت کی کابینہ کمیٹیوں میں غیر منتخب شخصیات کی بھرمار
Criss Cross’ Jude Garcia hardly missing beat in indoor return
EU launches probe into Meta, Apple and Alphabet under sweeping new tech law
وزیراعلیٰ دہلی اروند کیجریوال کی جیل میں بیٹھ کر حکومت، گرفتاری کے بعد پہلا حکم جاری
Heat build biggest lead in more than a decade, rout Cavaliers
عمر شریف نے انجان خاتون کی کیسے مدد کی؟
Fast-rising Eman Bacosa impresses in Blow-By-Blow
Posted on March 7, 2024 by Admin
3 min read
Federal Reserve Chair Jerome Powell fist-bumps former Treasury Secretary Steven Mnuchin after a House Financial Services Committee hearing on “Oversight of the Treasury Department’s and Federal Reserve’s Pandemic Response” in the Rayburn House Office Building in Washington, D.C., on Dec. 2, 2020.
Greg Nash | Reuters
The $1 billion-plus injection that New York Community Bank announced Wednesday is the latest example of private equity players coming to the need of a wounded American lender.
Led by $450 million from ex-Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital, a group of private investors are plowing fresh funds into NYCB. The move soothed concerns about the bank’s finances, as its shares closed higher on Wednesday after a steep decline earlier in the day.
That cash infusion follows last year’s acquisition of PacWest by Banc of California, which was anchored by $400 million from Warburg Pincus and Centerbridge Partners. A January merger between FirstSun Capital and HomeStreet also tapped $175 million from Wellington Management.
Speed and discretion are key to these deals, according to advisors to several recent transactions and external experts. While selling stock into public markets could theoretically be a cheaper source of capital, it’s simply not available to most banks right now.
“Public markets are too slow for this kind of capital raise,” said Steven Kelly of the Yale Program onFinancialStability. “They’re great if you are doing an IPO and you aren’t in a sensitive environment.”
Furthermore, if a bank is known to be actively raising capital before being able to close the deal, its stock could face intense pressure and speculation about its balance sheet. That happened to Silicon Valley Bank, whose failure to raise funding last year was effectively its death knell.
On Wednesday, headlines around noon that NYCB was seeking capital sent its shares down 42% before trading was halted. The stock surged afterward on the news that it had successfully raised funding.
“This is the unfortunate lesson from SVB,” said an advisor on the NYCB transaction. “With private deals, you can talk for a while, and we almost got to the finish line before there was any publicity.”
Mnuchin’s outreach
Mnuchin reached out to NYCB directly to offer support amid headlines about the duress it was under, according to a person with knowledge of the matter. Mnuchin isn’t just a former Treasury secretary. In 2009, he led a group that bought California bank IndyMac out of receivership. He ultimately turned the bank around and sold it to CIT Group in 2015.
Now, with the assumption that Mnuchin and his co-investors have seen NYCB’s deposit levels and capital situation — and are comfortable with them — the bank has much more time to resolve its issues. Last week, NYCB disclosed “material weaknesses” in the way it reviewed its commercial loans and delayed the filing of a key annual report.
“This buys them a ton of time. It means the FDIC isn’t coming to seize them on Friday,” Kelly said. “You have a billion Dollars in capital and a huge endorsem*nt from someone who has seen the books.”
Don’t miss these stories from CNBC PRO:
Related posts:
Capital One’s acquisition has $1.4 billion breakup fee if rival bid emerges, but none if regulators kill dealHere’s why Capital One is buying Discover in the biggest proposed merger of 2024Travis Kelce On Private Jet to Sydney to Go See Taylor SwiftPit Bulls Involved in Deadly Compton Mauling Euthanized by Animal Control
You May Also Like
Chrysler parent Stellantis laying off 400 salaried U.S. workers due to ‘unprecedented uncertainties’
March 22, 2024
The U.S. is the top country for millionaires and billionaires
March 22, 2024
NBC’s Paris Olympics opening ceremony will play on IMAX screens
March 22, 2024
More From Author
منتخب حکومت کی کابینہ کمیٹیوں میں غیر منتخب شخصیات کی بھرمار
March 25, 2024
Criss Cross’ Jude Garcia hardly missing beat in indoor return
March 25, 2024
EU launches probe into Meta, Apple and Alphabet under sweeping new tech law
March 25, 2024
You May Also Like:
Urdu News
منتخب حکومت کی کابینہ کمیٹیوں میں غیر منتخب شخصیات کی بھرمار
8 فروری کو ہونے والے عام انتخابات کے نتیجے میں وجود میں آنے والی شہباز حکومت نے بیک وقت تین کابینہ کمیٹیوں کی سربراہی غیر […]
Posted on March 25, 2024 by AdminSports News
Criss Cross’ Jude Garcia hardly missing beat in indoor return
Criss Cross’ Jude Garcia, right, in Spikers’ Turf.–PVL IMAGES PHOTO MANILA, Philippines — Jude Garcia showed no signs of rust in his return to indoor […]
Posted on March 25, 2024 by AdminFinance News
EU launches probe into Meta, Apple and Alphabet under sweeping new tech law
Executive Vice-President of the European Commission for a Europe fit for the Digital Age (Competition), Margrethe Vestager, holds a press conference on “Apple on App […]
Posted on March 25, 2024 by AdminUrdu News
وزیراعلیٰ دہلی اروند کیجریوال کی جیل میں بیٹھ کر حکومت، گرفتاری کے بعد پہلا حکم جاری
دہلی کے وزیر اعلیٰ اروند کیجریوال جو ان دنوں گرفتار ہیں نے دوران حراست پہلا حکم نامہ پانی کی کمی سے دوچار علاقوں میں قلت […]
Posted on March 25, 2024 by AdminSports News
Heat build biggest lead in more than a decade, rout Cavaliers
Miami Heat forward Jimmy Butler (22) looks to pass the ball as Cleveland Cavaliers center Tristan Thompson (13) defends during the second half of an […]
Posted on March 25, 2024 by AdminUrdu News
عمر شریف نے انجان خاتون کی کیسے مدد کی؟
پاکستان کے عالمی شہرت یافتہ کامیڈین عمر شریف کی اہلیہ زرین غزل نے مرحوم شوہر کی خوبیوں کا اعتراف کرتے ہوئے ان کی سخاوت کا […]
Posted on March 25, 2024 by Admin