BUSINESS BRIEFS
WaMu nears deal for $5B infusion
Associated Press
SEATTLE — Washington Mutual Inc., the country's largest savings and loan, is close to landing a $5 billion cash infusion from private equity group TPG and other investors, a person familiar with the matter said yesterday.
Wall Street cheered news that WaMu may join a growing list of battered financial institutions that have secured much-needed cash since the credit crisis began last summer. Shares jumped 29.3 percent, or $2.98, to close at $13.15 yesterday.
The investment would give TPG, formerly Texas Pacific Group, a mix of common and preferred stock, totaling less than 25 percent of WaMu's outstanding shares, according to the person, who asked not to be named because the deal has not been announced. TPG would also get a seat on WaMu's board.
CONSUMERS CUT BORROWING IN HALF
WASHINGTON — Consumers, battered by a credit crunch and prolonged housing slump, significantly slowed their pace of borrowing in February.
The Federal Reserve reported yesterday that consumer borrowing rose at an annual rate of 2.4 percent in February, just half of the 4.9 percent increase in January.
The slowdown reflected much weaker demand for auto loans and other type of nonrevolving credit, which rose at a rate of 0.4 percent in February, much lower than the 3.6 percent growth rate in January.
BORDERS, FINANCER REACH NEW TERMS
ANN ARBOR, Mich. — Borders Group Inc. said yesterday it revised a financing agreement with its largest shareholder under more favorable terms and now will focus on evaluating its strategic alternatives, including the possible sale of the company.
Borders said the revised agreement will require hedge fund Pershing Square Capital Management LP to pay $135 million for its international businesses, up from $125 million. Under the agreement, Borders has an option until Jan. 15 to require Pershing Square to buy its international subsidiaries if it is unable to sell those operations to other parties.
The revised deal also includes a lower interest rate — 9.8 percent, down from 12.5 percent — on its $42.5 million senior secured term loan and a reduction in the number of warrants issued to Pershing at closing.
CHEMICALS MAKER TO SETTLE LAWSUITS
W.R. Grace & Co. said yesterday that it had reached a deal that could be worth more than $3 billion to settle thousands of lawsuits from people who claimed they were sickened by exposure to the company's asbestos products.
The settlement could clear a path for the Columbia, Md.-based chemicals maker to emerge from one of the most complex bankruptcy reorganizations in U.S. history by year's end.
The accord, which must be approved by a bankruptcy judge in Pittsburgh, would establish a trust fund to pay current and future asbestos claims, which date back decades to when the company produced and sold products containing the substance. Grace, which employs 6,500 people in 40 countries, sought bankruptcy protection in 2001 after being confronted by thousands of such claims.
JAPAN TRIES AGAIN TO FILL BANK ROLE
TOKYO — The Japanese government nominated a former Bank of Japan executive director yesterday as its third candidate to fill a leadership vacuum at the head of the nation's central bank.
Prime Minister Yasuo Fukuda's government sought to end its dispute with the political opposition over who should lead the central bank ahead of a Group of Seven financial chiefs' meeting later this week.
Fukuda said his government submitted its nomination of Masaaki Shirakawa, who was recently confirmed as one of the bank's deputy governors. Shirakawa has been serving as the interim bank chief since Gov. Toshihiko Fukui retired on March 19.
