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WaMu Prices Offering of 3.0 Million Shares of Convertible Preferred Stock

SEATTLE--(BUSINESS WIRE)--Dec. 12, 2007--Washington Mutual, Inc. (NYSE:WM), announced today that it has priced a public offering of 3,000,000 shares of 7.75% Series R Non-Cumulative Perpetual Convertible Preferred Stock with a liquidation preference of $1,000 per share, resulting in an aggregate liquidation preference of $3.0 billion. The transaction was increased from its initial announced size of 2,500,000 shares.

The company expects the offering to generate net proceeds of approximately $2.9 billion, after expenses and underwriting discounts and commissions. The company intends initially to contribute up to $1.0 billion of the net proceeds from this offering to Washington Mutual Bank, its principal bank subsidiary, as additional capital, and retain the remaining net proceeds at the holding company for general corporate purposes. The company expects the offering to close on or about December 17, 2007.

The Series R Preferred Stock will pay, when and if declared by the company's board of directors, dividends in cash at a rate of 7.75% per annum, payable quarterly. The first dividend payment date will be March 15, 2008.

Each share of the Series R Preferred Stock will be convertible at any time, at the option of the holder, into 47.0535 shares of common stock of the company, which represents an approximate initial conversion price of $21.25 per share of common stock. The conversion rate and conversion price will be subject to adjustments in certain circumstances. On or after December 18, 2012, the Series R Preferred Stock will, at the option of the company, be subject to mandatory conversion into the company's common stock at the prevailing conversion rate, if the closing price of the company's common stock exceeds 130% of the then applicable conversion price for 20 trading days during any consecutive 30-trading day period, including the last trading day of such period.

Lehman Brothers Inc., Morgan Stanley & Co. Incorporated, Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co. are serving as joint book-running managers of the offering. The offering will be made under the company's existing shelf registration statement filed with the Securities and Exchange Commission.

This announcement is neither an offer to sell nor a solicitation of offers to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offers of the Series R Preferred Stock will be made exclusively by means of a prospectus and prospectus supplement.

A copy of the final prospectus supplement and accompanying prospectus relating to the offering, when available, may be obtained by contacting:

Lehman Brothers Inc., c/o Broadridge, Integrated Distribution Services, 1155 Long Island Avenue, Edgewood, NY, 11717, telephone: 1-888-603-5847, fax: 631-254-7140, or email: qiana.smith@broadridge.com.


Morgan Stanley & Co. Incorporated, Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY, 10014, telephone: 1-866-718-1649, or email: prospectus@morganstanley.com.


Credit Suisse Prospectus Department, One Madison Avenue, New York, NY, 10010, telephone: 1-800-221-1037.


Goldman, Sachs & Co., Attn: Prospectus Department, 85 Broad Street, New York, NY, 10004, telephone: 1-866-471-2526, or email: prospectus-ny@ny.email.gs.com.

About WaMu

WaMu, through its subsidiaries, is one of the nation's leading consumer and small business banks. At Sept. 30, 2007, WaMu and its subsidiaries had assets of $330.1 billion. The company has a history dating back to 1889 and its subsidiary banks currently operate approximately 2,700 consumer and small business banking stores throughout the nation. WaMu's press releases are available at http://newsroom.wamu.com.

Cautionary Statements

This announcement contains forward-looking statements, which are not historical facts and pertain to future operating results. These forward-looking statements are within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions and other statements contained in this document that are not historical facts. When used in this announcement, the words "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," or words of similar meaning, or future or conditional verbs, such as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. These forward-looking statements are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the results discussed in these forward-looking statements for the reasons, among others, discussed under the heading "Risk Factors" and in the prospectus supplement and accompanying prospectus relating to the offering. The company does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

CONTACT: Washington Mutual, Inc.
Media Contact:
Libby Hutchinson, 206-500-2770
Investor Contact:
Alan Magleby, 212-702-6955

SOURCE: Washington Mutual, Inc.