SEATTLE--(BUSINESS WIRE)--Sept. 27, 2006--Washington Mutual, Inc.
(NYSE:WM) announced today that it has settled its groundbreaking sale
of EUR 4.0 billion ($5.1 billion) of euro-denominated covered bonds.
WaMu is the first US-based bank to complete a transaction in the
$1.7 trillion European covered bond market.
"We are very pleased with the results of our first offering to the
European covered bond market, and we look forward to future successful
issuances as we continue diversifying our funding sources," said Kerry
Killinger, WaMu's chairman and CEO. "Our entry into the European
covered bond market is the latest in a long history of innovative
thinking at WaMu."
Killinger noted that the depth and liquidity offered by the
European covered bond market were compelling as the company considered
alternative funding sources. He added that WaMu plans to be a regular
issuer in this market to complement its other borrowings in the US.
"This program should make our debt more sought after on a global
basis, ultimately reducing our company's cost of funds, as well as
increasing our investor base beyond the US," Killinger said, noting
that the company also successfully issued a EUR 1.5 billion five-year
unsecured bond in late August.
The company's rating agencies have worked cooperatively in support
of WaMu's program. The company also worked collaboratively with the
FDIC and the Office of Thrift Supervision (OTS) as it developed its
European covered bond program.
"The demand we saw in this issuance was outstanding," said Robert
Williams, Senior Vice President and Treasurer of WaMu. "The covered
bond market represents a key diversification tool for us in the
context of our overall funding strategy."
Covered bonds differ from traditional mortgage-backed securities
in that the loans used to secure the obligations remain on WaMu's
balance sheet, allowing the company to maintain control over the
assets. The covered bonds are issued by WM Covered Bond Program, a
special-purpose entity which, in turn, purchases floating rate US
dollar denominated mortgage bonds issued directly by Washington Mutual
Bank. These mortgage bonds are recourse obligations of WaMu that also
enjoy the protection of loan collateral, unlike traditional
securitizations where investors only have recourse to cash flows from
underlying loans. The program then engages in a cross-currency swap,
providing investors with a fixed rate euro-denominated security.
The issuance was arranged by Barclays Capital, with ABN Amro and
Deutsche Bank joining Barclays as joint leads.
Size: EUR 4 billion ($5.1 billion)
Issuer: WM Covered Bond Program
Maturity: Series 1: 5 years, EUR 2.0 billion
Series 2: 10 years, EUR 2.0 billion
Underlying Collateral: Prime 1st Lien Mortgages
About Washington Mutual
Washington Mutual, through its subsidiaries, is one of the
nation's leading consumer and small business banks. At June 30, 2006,
Washington Mutual and its subsidiaries had assets of $350.7 billion.
The company has a history dating back to 1889 and its subsidiary banks
currently operate more than 2,600 consumer and small business banking
stores throughout the nation. Washington Mutual's press releases are
available at www.wamunewsroom.com.
CONTACT: Washington Mutual, Inc.
Alan Gulick, 206-500-2760
Investor Relations Contact:
Alan Magleby, 212-326-6019
SOURCE: Washington Mutual, Inc.