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Webster Financial Corp. Message Board

  • cololamahahual cololamahahual Mar 10, 2009 5:26 PM Flag

    $ 200 Million tender

    @ .80 on dollar this brings $40 million to the bottom line. Where did they get the $ 200 million or will they downsize the balance sheet ?

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    • Brilliant move, we get $400 million from TARP and pay 5% dividend for first 5 years, and retire the 8.5% notes at .80 on the dollar!

      Not only does this go straight to the bottom line, it tells you the bank is pretty confident that combined with the savings on lowering the dividend it has ample reserves going forward.

      I like this company - more storms are likely ahead but this company can easily move back into the teens when we all realize the global banking system is not going to implode.

    • a way to cut the short's throat.

    • Wouldn't that 200 mil have come from the capital they raised when they sold the preferr's last year? Believe it was 225,000 preferrs at 1G each. So in essence they reap a 20% profit minus any divy they have paid so far for those. Don't recall exact conversion but believe they paid 8.5% and could be converted to 37 or so commons if holder optioned to.

      Anyway this stock has stong upside potential especially once the run on credit card debt max hits the big banks. WBS has no exposure to that. Still believe it posts a profit no later then 2qt 2009.

      • 1 Reply to goldfevor
      • You are probably correct. The proceeds of the offering were held as short term investments which @12/08 were $1.2 Billion compared to $.6 Billion on 12/07.

        This $ 40 million gain plus $ 60 million from div cut provides $ 100 million in 2009 to absorb loss charge offs. We may see a profitable quarter in 2009 if the loan portfolio holds up.

 
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