Washington Mutual to Get $5 Billion

Wall Street Journal (04/07/08) P. A1; Karnitschnig, Matthew; Bauerlein, Valerie; Sidel, Robin
Washington Mutual Inc. (WaMu) is set to receive a $5 billion cash infusion from private-equity firm TPG and other investors, which will enable it to ease its capital requirements amid losses from the mortgage boom going bust. However, the injection of new capital will significantly dilute current WaMu shareholders, who have already lost a whopping 74 percent of their investment over the last year. Wall Street will be keeping a close eye to see whether TPG's investment, which comes as nearly every big U.S. mortgage lender is in financial straits, is an indication that the worst is over. The $5 billion infusion is being structured as both a common- and preferred-stock offering.