Spaniards Bail Out Guaranty Financial

Tyler Durden's picture

One would think that with a 17.8% unemployment rate the Spaniards have enough problems, right? Wrong. According to Bloomberg the winning (and highly subsidized) bidder for Guaranty is BBVA (Banco Bilbao Vizcaya Argentaria SA), Spain's second-largest bank by market value (probably not saying much).

Furthermore, one wonders just what additional bailout acumen BBVA has that Blackstone, JP Morgan, Felxpoint, US Bancorp do not. Then again, BVA already has a rather extensive exposure in the Alabama and Texas region, with 583 branches, after purchasing Compass Bancshares for $9 billion in 2007. And as everyone knows, synergies is what it is all about, especially if synergies is just another name for FDIC-povided taxpayer cash.

From Bloomberg:

Aug. 19 (Bloomberg) -- Banco Bilbao Vizcaya Argentaria SA, Spain’s second-largest bank by market value, was selected to take over the assets of Guaranty Financial Group Inc. in a government-assisted transaction, according to people familiar with the situation.

The Austin, Texas-based lender said last month that it was unable to raise capital as demanded by regulators and will probably fail. The Office of Thrift Supervision has taken over board functions, directed the bank to turn itself over to the Federal Deposit Insurance Corp. and is pursuing transactions likely to wipe out shareholders, Guaranty said in a July 23 filing with the Securities and Exchange Commission.

Bids for the bank were due on Aug. 18, the people said.

BBVA spokesman Ed Bilek and FDIC spokesman Andrew Gray declined to comment. A call to Guaranty spokesman John Wessman wasn’t immediately returned.

Blackstone Group LP, Gerald Ford’s Flexpoint and U.S.

Bancorp were among other groups considering bids for assets of Guaranty, people familiar with the situation said earlier.

Guaranty’s biggest shareholders include billionaire Carl Icahn and Omni Hotels owner Robert Rowling.

BVA ranks as the third-largest bank by assets in Alabama and fourth in Texas with 583 branches in the U.S., according to the company’s Web site. The company acquired Birmingham-based Compass Bancshares Inc. in 2007 for $9 billion.

Francisco Gonzalez, chairman and chief executive officer, of BBVA, discussed his interest in acquiring failed U.S. banks during visits earlier this year with Federal Deposit Insurance Corp. Chairman Sheila Bair, the Treasury Department and Federal Reserve, the Wall Street Journal reported yesterday.

And in order for readers to get a first person perspective of the exhaustive diligence that occurred, we present Guaranty's most recent notification of late filing, which concludes with this ominous warning that "any transaction would not be expected to result in the receipt of any proceeds by the stockholders of the Company", run translated through Babel Fish from English to Spanish:

NARRATIVA
 

Estado por debajo de razonable en detalle por qué las formas 10-K,
20-F, 11-K, 10-Q, 10-D, N-SAR, N-RSE, o el informe de transición o
parte de ella, no puede ser presentada dentro del período de tiempo.

Garantía Grupo Financiero Inc. (la "Compañía") es la presentación
de la presente notificación de la presentación tardía en el Formulario
12 ter-25 con respecto a la Compañía Informe Trimestral en el
Formulario 10-Q para el trimestre terminado el 30 de junio de 2009 (el
"Segundo Trimestre de 2009 Formulario 10-Q "). La empresa no puede, sin
esfuerzo y costo razonable, oportuno expediente para el segundo
trimestre 2009 Formulario 10-Q, porque la Compañía no ha completado sus
estados financieros para el año fiscal que terminó el 31 de diciembre
de 2008 o los trimestres terminado el 31 de marzo de 2009 y junio de
30, 2009.

Como se ha divulgado en el actual Informe en el Formulario 8-K
presentado por la Compañía el 23 de julio de 2009 (el "23 de julio
8-K"), la Sociedad y de su filial, Banco de garantía (el "Banco")
presentó una modificación de ahorro Informe Financiero ( "TGF") como de
y para los tres meses finalizados el 31 de marzo de 2009 refleja
activos sustanciales de saneamiento que se tradujo en el Banco negativo
de capital y que se considere críticamente undercapitalized como se
refleja en la tasa global de fecundidad a partir de esa fecha. Por
favor vea el 23 de julio 8-K para una descripción más detallada de la
TGF. Como se describe en el 23 de julio 8-K, la Compañía no cree que es
posible plantear un capital suficiente para cumplir con las órdenes de
cesación de las prácticas descritas en el Informe actual de la Compañía
en el Formulario 8-K presentado el 8 de abril de 2009. En consecuencia,
la Compañía ya no cree que sea capaz de continuar como empresa en
marcha.

La Sociedad sigue cooperando con la Office of Thrift Supervision
(el "OET") y la Federal Deposit Insurance Corporation ( "FDIC"), ya que
las alternativas para proseguir el negocio del Banco. Toda operación de
este tipo no se espera que como resultado la recepción de cualquier
producto por los accionistas de la Compañía.