WaMu sells bonds to boost capital
- Share via
Washington Mutual Inc., the biggest U.S. savings and loan, sold $3 billion of perpetual convertible preferred bonds Tuesday to shore up its capital after mortgage-market losses increased.
But the move didn’t cheer investors, who drove the company’s stock down $2.46, or 12.4%, to $17.42.
The Seattle company said Monday that it planned to raise $2.5 billion by selling convertible stock after writing down the value of its home lending unit by $1.6 billion and slashing its dividend. Washington Mutual agreed to pay 7.75% in interest, according to data compiled by Bloomberg News.
Washington Mutual sought the extra capital after forecasting a loss for the quarter and saying provisions for loan losses would be $1.5 billion to $1.6 billion, more than the $1.3 billion previously predicted.
The bank’s market capitalization has dropped 65% this year amid declining U.S. housing prices and record mortgage delinquencies.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
