Unstructured Finance

No Guaranty

An extended deadline for bids to pick up the pieces of Texas bank Guaranty Financial Group looms large today, and what happens will go a long way to setting the tone for bidding for Corus Bankshares, another troubled bank that faces a deadline in two weeks.

A big fat line in the sand stands between a source of potential interest and the dotted line on the bill of sale. Last month, the FDIC, which is overseeing the sales since it stepped in to rescue depositors, wants tough guidelines for private investors seeking to buy failed banks, including higher capital levels than other investors.

Still, at least one private equity consortium is said to want to play ball. The group represents some of the biggest in the game: Blackstone Group, Carlyle Group, Oak Hill Capital and TPG, sources said. Either they have some reason to be confident that the playing field will level out, or the assets of the defunct bank are just too valuable to pass up.

Colonial’s shut; what’s next?

Alabama’s Colonial Bank collapsed Friday under the weight of the financial crisis and allegations of fraud – making it the biggest bank to fail this year. 

US regulators shuttered the bank and sold its assets to BB&T, which got Colonial’s $20 billion deposits and an FDIC guarantee on $15 billion of assets. 

One analyst questioned how much of those deposits will stick with BB&T after the takeover, though. Colonial was paying about 100 basis points more for funds than BB&T, said Richard Bove of Rochdale Securities, in a research note.