Reports: Wamu to get a $5 billion infusion
"Washington Mutual Inc., the largest U.S. savings and loan, rallied in New York trading as a group led by private-equity firm TPG Inc. considers a $5 billion investment in the Seattle-based company.
"Negotiations with the TPG group are at an advanced stage, said a person familiar with the discussions, who declined to be identified because an agreement hasn't yet been reached. Washington Mutual needs the funds after reporting more than $3 billion of home-mortgage writedowns and loan losses.
"At least 14 banks and securities firms have sought cash from outside investors in the past year after more than $230 billion of markdowns and losses caused by the collapse of the U.S. subprime mortgage market, data compiled by Bloomberg show. Washington Mutual Chief Executive Officer Kery Killinger told shareholders in January he expected a ``dramatic'' increase in loans that will need to be modified to avert defaults."
The bad news? Banks, S&Ls, and investment banks continue to need to raise billions and billions of dollars to offset losses and write-downs. The good news? They're finding the money.