IndyMac close to being sold, says report

NEW YORK: Banking major IndyMac Bancorp, which collapsed in the wake of the subprime mortgage crisis, is close to being sold to a consortium of private equity and hedge fund firms, a media report on Tuesday said.

"IndyMac Bancorp, one of the largest banks to fail as a result of the subprime mortgage crisis, is close to being sold to a consortium of private equity and hedge fund firms in a complex deal partly financed by the federal government," The New York Times reported quoting people involved in the deal.

The Federal Deposit Insurance Corporation, along with a team of former Lehman Brothers bankers who are now with Deutsche Bank and Barclays Capital, has been engaged in the sale process, the report published online today said.

The federal regulators declared IndyMac insolvent in July and seized the company.

Further, quoting people involved in the deal, the daily said that even though the deal is in the final stages of negotiations, which are private, they cautioned that the talks could still fall apart.

"The team of buyers include the private equity firms JC Flowers & Company and Dune Capital Management and the hedge fund Paulson & Company...

But it was unclear exactly how much capital the buyers would inject into IndyMac, but they would be shouldering a portion of the losses the bank may have on mortgages and other assets," the report said quoting people involved in the deal.

According to the daily, the proposed deal is unusual because it is one of the first transactions involving unregulated private equity firms acquiring a majority stake in a bank holding company.