I agree that this is going to be a big deal for the debt markets. Especially if it is repeated again - which might suit the FDIC/government. It probably means that in the future investment grade bond indentures (trust deeds) will have to have the sort of Material Adverse Change language and other covenants that are typical in the junk bond market to protect the rights of lenders (who thought they understood where they stood before the government changed the rules).

However, while WaMu event seems to to be a slap in the face for fairness, it also smacks of a government/agency following poor advice. Perhaps the result of having an academic heading up the Fed? This surely undermines international confidence in the US capital markets just at a time when the authorities (Fed and Treasury) ought to be trying to bolster it and, as with Fannie and Freddie, will have consequences for other mainly US institutions that will have been wrong-footed by the FDIC action.

Yes, this unilateral action by the FDIC bypassed all the bankruptcy rules and, I think, will wreak long-lasting damage on the bond market. Who will now buy bonds from any bank, risking the chance that the government will takeover the bank and wipeout the bondholders as they just did with WaMu? Not me. I hope the bond ratings will reflect that risk. Under the current environment all FDIC-insured bank bonds should be rated at the junk level because that is exactly what they are.

I agree with the comments made by all here. This FDIC & Fed action is the biggest scandal that I have ever seen in the capital markets and they just killed the most effective way of financing for banks, the issuance of long term bonds. I agree with the previous comment that bank bonds are junk after this. in the future I will buy either equity or a 30 day CD from a bank. But I would never again will buy a bank’s bond in the future.

I understand that intervention was maybe justified to avoid generalized panic (We are already on panic anyway) but it is not fare that you treat one creditor differently from the others.

Of course, I don’t expect this to stay this way, there is going to be a huge lawsuit against the government. I represent bondholders in a fund that I manage and we will fight this until the end. We will sell all the rest US bank’s bonds remaining in the portfolio as soon as the liquidity returns a little bit after the end of the Quarter next tuesday.

Let me tell you, we had Wamu’s bond in the equity portion of our fund, so the failure is not a big suprise to us, it was a possibility that we had weighted . What it was not, was getting ZERO recovery value. No assets left over.
In he case of Lehman Brothers, we also had bonds, much more that Wamu, but it was a fair failure. The assets are frozen and a judge will liquidate and distribute according to legal rights.

I think that the all bond market will have to change after this, because neither Lehman or Wamu had to fail. They fail because the management made bad decisions and refuse to sale when there was still buyers. Also, in the current corporate structure, you have representation for the shareholders and representation for the government but there is not representation of the biggest asset class: the bondholders.

I think that in the future, every company that wants to issue public debt should include board members representing the bondholders. People that will call foul much much before than other board members and warn the market about reckless management.

This is not my first financial crisis, I worked as a financial advisor in Latin America and I have seen a few and I think that in the US Government there is a completely lack of experience on how to manage this situation, that is why I fear the worst.
The US government should call for help and advise to the rest of the world. Look how the English are managing their financial crisis?

They should call former Central Bank officials from Japan, Sweden, Germany, Mexico, Argentina, Brazil and ask for there advise. Of course they won’t do it and the crisis may deepen and take the rest of the world with them, like in the 30s or worst. It is sad seeing such a great country put it to it’s knees by a small group of corrupt oligarchs that had taken control of Washington and Wall Street. I hope the american people will put and end to this shame.

GA

Its a double whammy for me. I set up the second half of my retirement payout using a self-directed bond ladder. I had positions in both Lehman and Wamu. I am still hoping for some ‘pennies on the dollar’ in the Lehman settlement which starts its push through the courts next week. But this Wamu wipeout has me steaming. I had two 5-yr notes, and I am seriously thinking of decreasing my income tax payments this year and next to make up my losses, since my wonderful government paid no heed in destroying a chunk of my retirement. I am looking for a class-action suit to join!

I agree with everyone up here. This was a total utter scam at the expense of the creditors. I cannot believe that Wamu couldn’t have held up 2 more days for the bailout to happen. This was all planned by the FDIC and to my knowledge is unprecedented, which says a lot. I have lost alot of money in this investment and NEVER again will I invest in Bank bonds.

The total DEFINITION of a bond was changed following FDIC’s decision on Wamu. You are no different from a common stock holder which to me is absurd. What’s the point of the bailout if they let Wamu fail? They DIDN’T EVEN FAIL by the way the FDIC just seized them and we all know why. It’s a scam of the highest order. Buying Wamu for only 1.9 billion? I mean comon we all know its worth more than that. JPMorgan has some friends in high places. I just couldn’t believe that Wamu couldn’t have stayed “solvent” for 2 more days. Unbelievable.

This is the worst week of my life. I don’t know how any investor can trust bank bonds now when the total definition of a bond and the rules and procedures can be changed overnight. Heard Wamu has over $300 BILLION in assets. Why are we not getting compensated again? This baffles me.

Maybe someone here can shed some light on the situation. My broker thinks this deal was a total scam and he is waiting for his lawyers to inform him on the situation.

Hope we get more people to join this discussion. Any updates would be appreciated. There is no reason we shouldn’t fight for our hard earned money.

This is no lesson. This is a kick in the teeth. I lost $100,00.00 on senior debt that would have matured in Jan. 09. With the statements published by WaMu, stating they had sufficient liquidity to continue the business I decided to hold. There is always risk, and I can accept that; but this action by the FDIC reaks of bad decisions, poor advice, or colusion with other intities to feather the pockets of the reveiving organization.

I would for sure inter into a class action sute.

I agree with all of the above. I had a 50K bond maturing Jan 2009. My broker said the same thing as others have commented. WAMU didn’t have to fail. The FDIC declared it a failed bank to wipe out liabilities then immediately made a sweetheart deal for Chase to buy $300 billion in assets for $1.9 billion. Such a deal! The FDIC’s action was unprecedented and grossly unfair. I have written all my Congresssional delegation plus Senator Dodd, Rep Barney Frank, Rep Paul Kanjorski, Secretary Paulson about this outrage. I also intend to contact various media outlets in the hopes some investigative reporter will expose this scam. I am definitely interested in a class action law suit. An as others have said — buy no more bank bonds.

I AGREE WITH EVERYONE BAD MOVE FOR THE FDIC . I WAS TOLD BY SMITH BARNEY( JOHN CHRIS KAMKUTIS) THAT THIS WAS A GOOD BANK AND WILL PAY A 6.8750%. WASHINGTON MUTUAL BANK WAS IN VERY GOOD SHAPE. AND WAHINGTON MUTUAL BANK ALSO HAS A SUBSIDIARY , WASHINGTON MUTUAL FSB AT PARK CITY UTAH . THE HAVE COMBINED ASSETS OF $307 BILLION TOTAL DEPOSITS OF $188 BILLION. I WILL NOT BUY BANKS BOND AGIN.
I WOULD LIKE TO JOIN A CLASS ACTION SUIT .
GOOD LUCK TO ALL.

I agree with all comments and would be interested in a class action suit. I do believe we need to target the politicians and news media as a group. If anyone is interested please e-mail your thoughts.

I suggest we all fax letters ASAP to our respective Congressional delegations and Secretary of Treasury Henry Paulson (fax: 202-622-0073); Senator Christopher Dodd (fax 202-224-5137); Congressman Barney Frank (fax: 202-225-0182); Congressman Paul E. Kanjorski (fax: 202-225-0764) and ask that they include a provision in the renegotiated “bailout” bill to make whole (repay) the individual bondholders of WAMU who were wiped out by the unfair actions of the FDIC. You may want to mention that bondholders of AIG, Freddie Mac, Fannie Mae, and Wachovia were all protected from loss. We are being discriminated against — inequitable treatment. Don’t mail letters because all letters are screened for anthrax etc and it takes too long to reach the addressee. You can also call their offices — I called my Senators & Congresswoman - and raise hell about this rip off. DO it right away - as Congress is recessed for a day or two for Jewish holidays - so there will not be another vote on the bailout tomorrow. See LA Times article about the difference between WAMU and Wachovia-http://www.latimes.com/business/la-fi-citigroup30-2008sep30,0,1340631.story

Like a couple of posters here, I had a bond that was supposed to mature on January of next year. Watching CNBC right now, the Irish government has announced that it would safeguard the senior bondholders of a certain bank. Maybe they got hold of the WM story?

From this lesson, I have already instructed my asset manager not to purchase bonds from any bank that is under the jurisdiction of the FDIC. I do understand the risk if a corporation makes bad decisions and goes bankrupt. But this action by the FDIC was not something that I foresaw. If the FDIC thought that we would be sacrificial lambs, so be it. But as the saying goes, “once burned…”

I hold WaMu bonds and watched them basically get wiped out. The Fed had a second thought and made sure that the Wacovia bondholders were protected. I still think that there will be some fireworks regarding the WaMu bonds because I do not think the FDIC should have structured this deal without any thought to the debt. I have noted today that the price of the WaMu bonds jumped to 50.00 up from about 17.00 the day before. I have no idea why and maybe someone can answer that.

You can write a complaint to the FDIC online at https://www2.fdic.gov/starsmail/index.asp
for the “city, state” of the bank enter Seattle WA — WAMU’s headquarters.
Keep the pressure on with members of Congress. Contact Rep Carolyn Maloney’s office in Washington DC . She is chairman of the House Financial Services subcommittee with oversight for the FDIC. 202.225.7944 phone
202.225.4709 fax. Ask for her staffer for the subcommittee, Ed Mills — Unfortunately I just called and his voicemail was full so I am faxing a letter asking for an investigation of the unfair way the FDIC handled the WAMU “failure” and sale.
Fight for your rights.

We are in the same boat as all other WaMu bond holders. Looks like we lost our $20K. I am writing/faxing everyone in Congress tomorrow morning first thing. Thanks for the info here as I had a hard time finding it anywhere else. Who knows a good lawyer for a class action??
BTW, just called and was able to leave a voicemail at Carolyn Maloney’s office.

Hang in there, or as Keith Olberman says “good night, and good luck.”

I note that there is some value showing in my online account, but that broker seems to know nothing as to why. So it would appear that something is cooking and if anybody knows what, please post it. Like all others on here, I would join a class action.

The reason why there is some value showing up is because there is a belief that it is not totally without value. This is the headline from Reuters:

“NEW YORK, Sept 29 (Reuters) - Washington Mutual’sWAMUQ.PK senior unsecured bondholders could recover more than 80 percent of their principal if the company does not move assets to its banking arm, independent research service CreditSights said on Monday.”

It all depends on what assets are left on the holding company and whether the holding company will move it. Since this is all in bankruptcy, any action requires the approval of the bankruptcy judge. So, we have to be always on the look out for any petitions from the debtor, that is Washington Mutual.

It is also my understanding, from checking the bankruptcy filing, that Bank of New York Mellon is the trustee of most of the unsecured bonds. We, that is the bondholders, are the beneficiaries. So, we basically have to also let Bank of New York Mellon know about our wishes. Inquire with your brokerage firm.

Right now, the initial bankruptcy filing shows:

805 million for the senior 4% fixed due 2009
359 million for floating rate notes due 2009
504 million for 4.2% due 2010
176 million for floating rate notes due 2010
361 million for 5.5% due 2011
376 million for 5% due 2012
363 million for floating rate due 2012
447 million for floating rate due 2012
730 million for 5.25% due 2017
452 million for 8.25% subordinated notes due 2010
732 million for 4.625% subordinated notes due 2014
440 million for 7.25% subordinated notes due 2017

Obviously, the senior notes have preference in bankruptcy proceedings. For those interested, the case number in bankruptcy is 08-12229. If you know are an attorney, know of an attorney, or have an attorney, you can easily use the Federal Court’s PACE system to check on the status of the case.

Good luck everyone. Some are saying that a typical bankrutcy case like this runs about 18 months.

I am very upset at the actions of both the Federal Reserve and Congress. Specifically, bond holders of financial institutions who fund the expansion of the private sector economy are being robbed. For many years I have proudly invested in stocks and bonds in support of American business. This support was encouraged by government as a proper and prudent action that all Americans should pursue.
Judging from recent actions of both the Federal Reserve and Congress it now seems that bond holder’s money is free to be taken without repercussion. The fact that the desperate actions taken by Washington Mutual were hidden from the public seems to be of no concern to the Congress.
Judging from these recent actions I feel it is no longer prudent to invest in American business and feel that Congress is unable or unwilling to provide safe harbor for middle-America’s retirement funds. I am forced to liquidate all of my holdings to be reallocated to foreign funds which seem to have better oversight and a more even handed approach to investors.
Those of us who have taken pride in investing in America are left with few choices. Will we be robbed of our highly rated bond funds and be expected to also fund questionable mortgages through our tax dollars? Something I thought I would never contemplate, has it become too expensive to continue to live in the US?
Only those who are willing to be fooled again will invest in America.

Disgusted and Angry,
Michael Balster

I was told a several months ago by my “broker” at Smith Barney, that I should sell my shares of GMAC preferred stock at a huge loss, which, he said was going to go under. He said I should buy Washington Mutual preferred stock instead, which would be a 90% sure bet. Almost immediately it started its’ slide to oblivion. Shouldn’t he have had a clue that this would happen? I am blown away, as my losses, for me, have been so major. I am a simple person, and trusted this man with my modest portfolio. Now, I am just waiting for a class-action lawsuit to occur. I will hop on at a moment’s notice. I am furious for ever trusting anyone in the brokerage or banking business. Never again! Oh, but wait, it is all too late for that, as I have lost most of my money. I know another couple that this broker did the same thing to, exactly. Do they not have some legal responsibility?

WaMu bonds are still trading, I sold my Jan 2009 bonds for $.65 on the $1 today. I paid $.83 on the $1 so the loss is tolerable. I learned a long time ago that buying common and preferred stock gives you no options in times of trouble. Even in bankrupcy you can sell a bond and minimize your losses. I have been buying financial bond for 1 year now returning 15-30+% and this is the first one that I had to exit without being paid the full face value.

In the last recession this same thing occured with telecon comapny bonds, most did not fail. This recession it is insurance and bank bonds. My advise become a bond trader. What other investiment will gurantee that you make money each and every trade unless the company goes bankrupt and even in this case you can still get $.65 cents on you dollar investiment. Spread this out over 20+ financial companies and you will see a 18% rate of return as I have this year. In 2002 it was 25% rate of return on telecon bonds.

In the non recession year, you might have to settle for 6-7% per year. Is that really so bad? Never a negative year so long as you hold all bonds to maturity only selling when you have a bankrupcy.

I thought I would share this link regarding Hang Seng Bank, which lent its name to the Hong Kong stock market index. It shows how the default of Washington Mutual’s unsecured bonds have affected its stocks. This little noticed action by the FDIC is starting to have serious repercusions in the market for corporate bonds of U.S. financial institions. It is government action without compensation.

See http://www.bloomberg.com/apps/news?pid=20601087&sid=aO95wzsC7S5U&refer=home

Just one more newslink for today: http://seattle.bizjournals.com/seattle/stories/2008/09/29/daily20.html

All I’ll say is that bankruptcy proceedings are sometimes a game of chicken. Who actually knows what will be the total amount of assets available for distribution to the creditors. As Greg commented, there is currently a secondary market for people who want to sell or buy these bonds. Of course, it is going to be a loss (and hopefully, a tax loss) for the sellers. So, we all have to decide from our own personal perspective what to do.

Thank you everyone for all the information.

Dave

Seizure of WaMu Raises Questions Of Corruption!

From netzworld

While the markets were closed, and the Chairman of Washington Mutual was on a flight from New York to Seattle, the largest theft in US history took place. Although there has been negative news about the financial stocks for the past few months, including Washington Mutual,the FDIC and Washington Mutual repeated assurances that the bank was in good shape through 2010 over and over and the fact that WaMu met it’s daily requirements. If that is the case, the seizure and immediate for profit sale of WAMU to JP Morgan Chase raises many questions.

This isn’t so much about the failure of WAMU, as that may have happened eventually anyway, but suddenly the FDIC has become a for profit institution taking over and selling off a company for 1.9 Billion dollars. This is unprecedented in many ways, and in many ways probably illegal. The shareholders own WAMU, not the FDIC. Yes, the FDIC regulates banking, however shareholders own the company. WAMU could have literally gone bankrupt and sold off chairs, computers, land etc and shareholders would have received some portion of compensation. In this seizure, Chase gets the assets and deposits at a bargain, the FDIC gets 1.9 Billion dollars and shareholders get nothing. It is literally something you might think would happen in Nazi Germany, not the United States.

It seems as if these failures are following a pattern that we are seeing over and over. First, short sellers work to smear the bank’s reputation. Major media outlets join the fray. Analysts downgrade. Ratings agencies follow with downgrades. Cost of insurance skyrockets creating self-fulfilling prophecy. The Bank forced to come up with reserve capital to please ratings agencies. Dilution of shareholder equity at sale prices. Share price falls further triggering more downgrades from above-mentioned entities. The Media really starts to salivate now and creates all kinds of instability with doom and gloom, and seem outright gleeful about it. Then institutions and high net worth individuals begin pulling deposits out of the targeted bank. Further ratings agencies downgrades. The media then creates a self fulfilling prophesy with constant reporting of doom and gloom and individuals also pull their money out of the targeted bank. Then the FDIC having all the ammunition it needs steps in and seizes the bank assets and sells them to whoever they are in bed with that week.

Basically the government decided that they liked JP Morgan Chase so much as an institution that they would gift them this company.

It’s worse than that though, last week Goldman Sachs upgraded WM to hold knowing all of this was going on. Serious misrepresentation of the facts. The story told to the public was that Goldman was supposed to be brokering a sale. This at the expense of average Americans. Sure there are a lot of institutions that owned shares in WAMU, but there are an incredible amount of average Americans who had large portions of their retirements tied up in WAMU stock. Without that upgrade, many may not have kept the stock through this trouble. Some are now threatening suicide. Families are breaking up. People have lost everything. How can the American public not be safe investing in an American Bank. A bank that owns assets, that had a large deposit base and that stated it could sustain life until 2010.

That doesn’t even begin to mention that by next week the whole dynamics of WM could change for the better with the government bailout coming. Stock could have increased in value once the toxic paper was taken from WM. More liquidity would have been available. The 2010 deadline would be extended to many more years once the toxic paper was removed. This was not a bank in trouble in any of the standards that have been repeated over the last eighty years.

You really want to get upset about it, take a look at the aftermarket trading volume. Before any of this was announced, there were three very large trades in the early aftermarket, in a three minute period totaling almost 13 million shares. The FDIC and the markets allowed someone to get inside and make away with some 12 million dollars. There is no way that trading should not have been suspended before this was allowed to happen, just another case of corruption and manipulation by the government and large institutions.

Possibly the most damaging could be what this could do to the American psyche as a whole. The corruption in the system has just killed the morale and spirit of many people. They have no trust in Wall Street, the financial system, politics and the future of America! Corruption, short selling, manipulation of stock, and abusive ratings downgrades are all responsible for bringing this company down to the point that this could happen, and then a corrupt government agency cherry picked a bargain for their buddies at JPMorgan who get a huge upside. The FDIC facilitated a transaction that was so corrupt and damaging words cannot properly describe it.

In the end, it is the system as a whole that will lose, as the average American can no longer trust not only it’s banking industry, or Wall Street, but apparently it’s government anymore.

===================================================
Sent a letter to your congressman and senator about the illegal seizure of WAMU

How to contact with the congressman and senator

http://www.house.gov/htbin/zipfind

http://www.senate.gov/general/contact_in...

http://www.wamurape.org/default.aspx?g=p...

==============Repost as following ===================

I have used some information from other WM Shareholders letters and constructed by own variant. Send this to your Congressman and Senators as is, or modify to your liking. I also sent this to the Whitehouse including the FDIC Chair. News agencies in every major city were cc’ed.

Dear :

I am writing with deep concern involving the recent seizure of the Washington Mutual Federal Bank by the FDIC on Thursday, September 25, 2008. What is particularly disturbing about this event is the deception and dishonesty leading to a perceived conspiracy between the FDIC and JPMorgan Chase that ultimately resulted in what appears to the largest government-assisted theft in U.S. history.

Although I do realize the FDIC and OTS positions in striving to protect bank depositors and taxpayers interest, it seems this particular action is not representative of a democratic society. I am specifically outraged on learning of the FDIC/OTS conducting a “secret auction” of Washington Mutual without informing shareholders which thereby disallowed executive management to meet its fiduciary and legal obligation to protect and work in the best interests of shareholders as expressed in the corporate bylaws.

Washington Mutual CEO, Alan Fishman, repeatedly stated as of Monday, September 22, in a letter to shareholders, that the company’s liquidity was above the minimum for well-capitalized banks and he was excited about the future of Washington Mutual. The company had $380B in assets, $143B in deposits and earned $2B per quarter on interest income. Additionally, Fishman said the company had access to $50B in cash if necessary. Fishman stated the company was in better shape than that reported by media numerous times and also stated Washington Mutual could sustain operations thru 2010. We as shareholders now know the bank-run to the amount of $16B in the nine days leading up to September 25 is what actually triggered the seizure. Blame for this fear-induced act certainly lies in part with Wall Street and its questionable practices such as stock shorting as well as the media’s sensationalized and often incorrect or prejudiced reporting. However, what is most disturbing is the reported FDIC/Washington Mutual collusive act to suppress information regarding deposit withdrawal during, at least, that nine day period. Shareholders were unaware this was occurring, or more specifically, were unaware that it had occurred to this extent. I respect the action the FDIC must take to protect the reserves, but not issuing public notice or providing awareness of an ongoing investigation of insufficient funds was wrong. Washington Mutual shareholders were caught off-guard and we lost everything.

Sent a letter to your congressman and senator about the illegal seizure of WAMU

How to contact with the congressman and senator

http://www.house.gov/htbin/zipfind

http://www.senate.gov/general/contact_in...

http://www.wamurape.org/default.aspx?g=p...

==============Repost as following ===================
I have used some information from other WM Shareholders letters and constructed by own variant. Send this to your Congressman and Senators as is, or modify to your liking. I also sent this to the Whitehouse including the FDIC Chair. News agencies in every major city were cc’ed.

Dear :

I am writing with deep concern involving the recent seizure of the Washington Mutual Federal Bank by the FDIC on Thursday, September 25, 2008. What is particularly disturbing about this event is the deception and dishonesty leading to a perceived conspiracy between the FDIC and JPMorgan Chase that ultimately resulted in what appears to the largest government-assisted theft in U.S. history.

Although I do realize the FDIC and OTS positions in striving to protect bank depositors and taxpayers interest, it seems this particular action is not representative of a democratic society. I am specifically outraged on learning of the FDIC/OTS conducting a “secret auction” of Washington Mutual without informing shareholders which thereby disallowed executive management to meet its fiduciary and legal obligation to protect and work in the best interests of shareholders as expressed in the corporate bylaws.

Washington Mutual CEO, Alan Fishman, repeatedly stated as of Monday, September 22, in a letter to shareholders, that the company’s liquidity was above the minimum for well-capitalized banks and he was excited about the future of Washington Mutual. The company had $380B in assets, $143B in deposits and earned $2B per quarter on interest income. Additionally, Fishman said the company had access to $50B in cash if necessary. Fishman stated the company was in better shape than that reported by media numerous times and also stated Washington Mutual could sustain operations thru 2010. We as shareholders now know the bank-run to the amount of $16B in the nine days leading up to September 25 is what actually triggered the seizure. Blame for this fear-induced act certainly lies in part with Wall Street and its questionable practices such as stock shorting as well as the media’s sensationalized and often incorrect or prejudiced reporting. However, what is most disturbing is the reported FDIC/Washington Mutual collusive act to suppress information regarding deposit withdrawal during, at least, that nine day period. Shareholders were unaware this was occurring, or more specifically, were unaware that it had occurred to this extent. I respect the action the FDIC must take to protect the reserves, but not issuing public notice or providing awareness of an ongoing investigation of insufficient funds was wrong. Washington Mutual shareholders were caught off-guard and we lost everything.

It is upsetting that Alan Fishman received $19 million for 17 days of employment. Since he made misleading statements, shouldn’t he be sued?

We also had a bond ladder that is now $25,000 short. We counted on this income as part of our retirement.

PLEASE IF YOU KNOW OF ANYBODY WHO GOT THE BONDS FROM SMITH BARNEY PLEAES LET ME KNOW. I WOULD LIKE TO HEAR THEY STORY .
I AM LOOKING FOR A GOOD LAWYER BUT NEED HELP.
FRED7236@AOL.COM
THANKS

THIS IS THE ADDRESS FOR ALL CLAIMS
FDIC AS RECEIVER OF WASHINGTON MUTUAL BANK
1601 BRYAN STREET
DALLAS , TX 75201
ATTENTION: CLAIMS AGENT

Sell the bonds you can still get $.65 for each $1. I read one report that indicates a $.80 for each $1 is the best you will get. Once lawyers get involved you will have nothing left to get even with a class action lawsuit.

Nothing illegal was done. WaMu experienced a run on the bank. No bank can withstand a run on the bank, not even BofA. The FDIC siezed the bank legally. The CEO was correct on Sept 22 then the run occured in one week. So forget about lawsuits and recovering anything, sell your bonds before even the $.65 goes away. Some bonds matur in Jan 2009 when investors get nothing, and they will, the prices of WaMu bonds will tank.

Take action while you still can…..

To follow up on Greg’s posting, I think the price he is stating is for the senior bond that is maturing on January 2009. I have seen sales ranging from 60 cents for a Dollar to 63 cents for a Dollar, depending on the particular transaction.
You can check this website for the transactions: http://www.investinginbonds.com/marketataglance.asp?catid=34
Under bond history, enter the SUSIP number of your bond (hint: for the Jan 2009 4% bond, it is 939322AL7. The website will open another window, ask you to agree on the terms for reading the information, and then open another window with a list of the transactions up to current.
If you decide that you would cut your losses, contact your broker and tell him or her to sell the bond on the secondary market. He or she should come back to you and let you know the price of the bond at that moment.

For Fred Wimmer: You have to check the federal bankruptcy court in Delaware. The court case is 08-12229. Other bondholders with tons of WM bonds do already have attorneys representing them. We are just little flies here. But you can keep yourself informed about the court case by filing a notice of appearance. Then the court is obligated to let you know what is going on with the case. I am sure you have a personal attorney who can help you with that. Good luck.

The FDIC is a disgrace and out of control. It pays them to close a bank early (Washington Mutual) so they don’t have to pay out funds. Then they give the company away for nothing to one of their friends and pocket the proceeds from the sale. Screwing the bond holders who built the company. You would get a better deal in Russia. Doesn’t sound like an arms length transaction to me. In addition they closed Washington Mutual on a thursday night (no run on the bank), guess when- just when the Fed Bill had failed. I think the bond holders should look iinto filing a suit against the government. In any event that is why no one wants to lend to a bank and I would never buy a financial company’s bond again.

I had a bond (senior undecured debt) due to mature Jan 2009, so I wrote to FDIC and here’s their “sympathetic” response. My broker sold mine for 64 cents on the dollar. See third paragraph from bottom. You might want to do the same.

Date: October 4, 2008
Thank you for contacting the FDIC regarding your Washington Mutual bond. We sympathize with your situation.
Based upon your e-mail, you are aware that on September 25, 2008, Washington Mutual was closed by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation was named receiver. Subsequent to the closure, JPMorgan Chase acquired the assets and most of the liabilities, including covered bonds and other secured debt, of Washington Mutual Bank from the FDIC as Receiver for Washington Mutual Bank. Investor relations information is provided below for your reference:
Investor Relations
JPMorgan Chase & Co.
270 Park Avenue
New York, NY 10017-2070
212-270-7325
JPMCinvestorrelations@jpmchase.com

Claims by preferred stockholders, subordinated debt holders, and unsecured senior debt holders of Washington Mutual Bank were not acquired; these claims, together with proof of the claims, must be submitted in writing to the Receiver at the following address:
FDIC as Receiver of Washington Mutual Bank
1601 Bryan Street
Dallas, TX 75201
Attention: Claims Agent

The closure and the receivership do not affect the claims by equity, debt holders or other creditors of Washington Mutual, Inc., the holding company for Washington Mutual Bank.

The holders of equity, subordinated and unsecured senior debt in Washington Mutual Bank are creditors of the receivership for Washington Mutual Bank and should file claims in the receivership for recovery of any amounts that may be due to them. Please note that under federal law, 12 U.S.C. § 1821(d)(11), claims by equity and subordinated debt holders are subordinated to claims by general creditors of the institution. At this time, the FDIC as Receiver for Washington Mutual Bank does not anticipate that equity and subordinated debt holders will receive any recovery on their claims.

The opinions expressed herein should only be considered advisory in nature. Such opinions are not binding upon the FDIC or its Board of Directors. In addition, the information provided is not meant to be all inclusive and the opinions expressed herein are based upon the facts presented in the request. Any changes in the facts or circumstances may result in different conclusions.

We hope this information is helpful to you. As part of our ongoing efforts to improve our service to the public, we would appreciate it if you would complete a short questionnaire on the level of service you received from this office. The questionnaire form can be accessed at http://www2.fdic.gov/starsmail/customer.html
Sincerely,
Federal Deposit Insurance Corporation
Division of Supervision and Consumer Protection

My wife and myself are retired and also took a very large hit with WM’s bonds. Unfortunately most of ours were subondinate debt and will not much more than pennies on the dollar. I hope there is a legal challenge to the way the Fed sold out the bondholders.

Al

I sold my two 5-yr Wamu SR bonds yesterday (10/7) for 61 cents on the dollar. After the statement made by the FDIC, I do not understand where the market is for these bonds. When I asked my broker, he offered that there are big wig investors as well as institutional investors who can afford to wait for this mess to drag through the court settlement and are willing to accept the risk that these bonds will regain more of their face value in the end. I did not want to wait. I took the proceeds and bought two 3-yr CD’s paying 4.6%. I still have two Lehman bonds sitting with a market value of 1/6 th their face value, will probably take a chance and hold on until the court decisions are complete. Wonderful times we are living in!

Pat, don’t know what to say. The price of the bonds changes day to day, and transaction to transaction. I believe it is now around 51 cents on the Dollar now, right? You have to decide whether to take the offered price if your dealer finds a buyer, or hold onto it. Who knows.

Presumably there is a market in one or two of the cheapest-to-deliver bonds, as credit default swap holders and issuers maneuver prior to the settlement auction on the 23rd. I would not be at all surprised if there are few or no trades happening in any of the other issues. But I’m strictly a spectator, and could be dead wrong.

If you hold physical bonds and want to liquidate them, but there are no transactions in your particular bond, then you may want to ask your broker if any corresponding CDS (issued by a stable counterparty!) is trading in the secondary market. If you can get hold of such a thing in time, you can opt for physical settlement. Effectively, you pay for the CDS now, and then get a price for (your bond + the CDS) equal to its principal amount, payable a couple of weeks after the settlement auction. Again, *if* the CDS counterparty is able to pay. Caveat emptor.

Dear all bondholder´s creditors:

I also had positions in both Lehman and Wamu.

I have read all comments and opinions and would like to know any recommendation of hiring a qualified law office in this matter to represents our interests.

Thanks,

Jose Fouget

I have a spinal cord injury-paralysed waist down from Auto accident. I invested based on advise of my broker in WAMU bonds from part proceeds of my medical injury claim. My borker says this has never happened in US history.

I would like to join the class action lawsuit and also will try contacting the congress reps.

The writer-Author of the press release assumed that WAMU shareholders will be wipeout in bankruptcy. However, it looks like the writer-Author is not aware of the 10Q and the documents that were filed by WAMU in the Bankruptcy Court, showing a total Assets of 32 billion and with a total liabilities of 8 billion dollars. The 24 billion left after liabilities is more than enough to pay off the existing 8 billion for bond holders and the 6.5 billion preferred stocks, wherein about 17.5 billion (about $9.21 per share) will be for common stock shareholder. It should also be noted that the 1.9 billion paid by JPM which is now being held by FDIC is not included in the computation.

With the abovestated facts, I cannot imagine how the shareholders are wipeout. To be credible, the Writer-Author should include the figures how and why the WAMU shareholders are wipeout.

To those wondering why there’s still a market for WaMu bonds, check out this article:

http://www.bloomberg.com/apps/news?pid=20601127&sid=aFPZyK8w8IVY&refer=law

According to the article, there’s still $5 billion cash to be fought over.

More information:

http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D93J5JM80#adSkip

In connection with the FDIC receivership for Washington Mutual Bank (WaMu Bank), as well as the Delaware Chapter 11 proceedings for Washington Mutual, Inc. (NYSE: WM) and WMI Investment Corp., a group of WaMu Bank senior and subordinated noteholders formed last week in order to discuss matters of mutual interest. The group, which continues to grow, includes more than two dozen institutional investors and secondary market purchasers holding close to USD 2 billion in senior and subordinated notes. Other WaMu Bank noteholders interested in participating in the group should contact the group’s counsel, Evan Flaschen at Bracewell & Giuliani LLP, 860.256.8537.

http://www.streetinsider.com/Press+Releases/WaMu+Bank+Noteholder+Group+Represented+by+Bracewell+%26amp%3B+Giuliani+LLP+Forms+to+Participate+in+the+Receivership+for+Washington+Mutual+Bank+and+the+Chapter+11+Proceedings+for+Washington+Mutual%2C+Inc./4052863.html

For those of you with bonds, please take what you can get and hurry.

Our Wachovia broker gave solid advice, but my husband felt strongly based on the information released, that WaMu was a solid investment.

He invested everything we had (I can’t believe it either) in WaMu common stock. We have lost everything. Unprecedented is not a word that brings comfort at a time like this.

So I too, would be deeply interested in any ideas regarding a class action suit, or any chance of even a 10% recovery at this point. Our loss totalled $135k…..

this sound good to me . if we can get mone bondholder in on this. fred

I couldn’t believe how bondholders and shareholders got screwed over. How about the bailout? They’re giving 25bil to JP Morgan Chase while WAMU investors get nothing?

I no longer own WM bonds. I decided to sell them. But for those who are still holding up and seeking compensation, here is an article that provides some clarity:

http://seattlepi.nwsource.com/business/382640_wamusuits10.html

Most important for the bondholders:

“Meanwhile, WaMu is involved in two bankruptcylike proceedings. One is the actual Chapter 11 filing by the holding company in federal court in Delaware. The other is the FDIC receivership of the parts of the bank that weren’t sold to JPMorgan Chase, including about $20 billion in unsecured senior debt, subordinated debt and preferred stock.

In both cases it’s up to the judge or receiver to sort through what assets remain and match them with liabilities and claims from creditors. Assets in the bank-level FDIC receivership, for example, include the $1.9 billion payment by JPMorgan Chase for the deposits, loans and branches.”

As what Fred Wimmer posted earlier, senior bondholders have to register with the FDIC so that they can partake from the $1.9 Billion that JP Morgan paid the FDIC for Washington Mutual.
Then, there is the actual Chapter 11 bankruptcy in which the holding company’s assets and liabilities have to be determined and distributed.
From a check of the Chapter 11 bankruptcy proceeds, we all know that the $1.9 Billion that the FDIC has will be not be enough to pay all the senior bondholders. So, I don’t know how much you will be able to collect from the FDIC.
Well at least now, you know there are two sources for recovery. Good luck eveyone.

Please tell me the name of the attorney or law firm that is suing the OTS and FDIC. I cannot seem to find a law firm who believes that the OTS and FDIC can be sued because of their immunity.

I purchased 277,000 shares of WAMU on Sept. 25th, after the date was set in stone to seize WAMU. I feel that the OTS had an obligation to stop the sale of WAMU stock at the point in time that it determined the seizure date. I lost $500,000.00 in less than 24 hours and the OTS let it happen and caused it. The OTS agent told me that no warning was given to stop buying WAMU stock and they allowed me to be harmed because it did not want to cause a panic and a run on the bank which could have caused more harm to the FDIC fund.

If the OTS chose to sacrifice me and others in order to prevent a potential run on the bank which, according to the FDIC, could have cost them 31 billion dollars, then the FDIC and OTS should pay the damage they cause to me and others by keeping their seize date secret.

Bottom line, can the OTS be sued and did the OTS have an obligation to warn off buyers of the WAMU stock after the seizure date was set in stone?

Please see websites wamucoup.com and wamurape.org for more information on what happened in this mess.

So far, it seems no one has found an attorney that will handle this and the stockholders and bondholders of WAMU sure need one. The FDIC made a similar blunder in 1993, and the courst said they had to fix it. (see WAMURAPE.ORG for a link to that story and many others) It appears to ME that FDIC CAN be held accountable…I have not found an atty that will even answers phone calls or e-mails re this. If anyone finds an atty, PLEASE post it here and on the sites names above. We NEED to have our day in court. We did not lose as much in this as many, but one thin dime is too much when the FDIC should not have conducted themselves the way they did.

The FBI is looking for info and input on what happened here. i suggest you e-mail the Seattle FBI, all your congress people, and anyone else you can think of who might take action here. The FDIC is one of the current investigating bodies, but THEY are the folks who need to be investigated!!!

Never has the law been so applied with such disregard for it’s intention. At the moment the eyes of the country were on the markets, Somebody climbed up to the top of a building near by and screamed BANKFAILURE!! Government regulators were the one’s responsible for protecting us. But they circulated insider information aboutt he bank to it’s competitors and put the blood in the water amongst the sharks.

When the FDIC releases a statement about a transaction between itself and another bank, that statement pertainst only to those two organizations and the transaction between them. Reporter after reporter after reporter has failed to note this as they spin a terrible tale of woe about the company and the bond holders. And the media frenzy has everyone confused about the matter. The quality of the news has been deplorable with a few grains of sand used to imply a beach and an ocean. And more than seven trillion dollars left the country! Evaporated in a media riot of sensationalist dross.

The bears have raided every stock and public issue. The “buy and hold” investors in the stocks and bonds have been crushed. The value of these securities as listed is now about the speculation about what has happened. And not about the the actual values involved. Stock holders and bond holders fears are fed by these articles, but we really know nothing without a schedule of assets. Panic amongst the bond holders will certainly break this company. And reporters like this are all for it.

I sent all my money to the US , in bonds of WM , and now I lost it all . The money of all my life . I used to think in the US as a safe haven for my money . And now ?
Crooks have taken my money ! SHAME ON YOU UNITED STATES!
SHAME the way you ripped me off !!! Is this what you mean by “the defender of freedom in the world “?
SHAME!!! ONE hundred times shame on you !!! If you don’t
put this things right … I hope ALL the foreign people that have money in America will take it back to their countries ….and NEVER again put a dollar in the US …
CROOKS!!!

Wachovia Bank is now being sued for the price at which it agreed to sell to Wells Fargo. Several of the posters here have wondered about a law firm engaged in this type of action. According to AOL today, such a firm is Wolf, Popper in NYC attn: Carl Stine seeking to form a class action.

I only can sayone thing : there were THREE CROOKS in this robbery:
1) —- The staff of WAMU - they knew what was going to happen and THEY PROVOKED this to happen !
2) —- The staff of MORGAN - they came to an
arrangement with WAMU and the FEDS to buy the bank
with some pennies … (what arangement? THAT IS
THE QUESTION…)
3) —- THE FEDS — the matchmakers of the marriage of the CROOKS number 1 and the CROOKS number 2… of course …. they didn’t do this …for “nothing”…..

WHO WILL BELIEVE THE STUPID STORY that the bank was “SOLD” for 1.9 billon ???? THE ROBBERY
IS SO OBVIOUS THAT IT SCREAMS TO HEAVEN !!!!

so YOU HAVE 3 crooks THAT FORM A TRIANGLE and will
COVER each other …. WHAT HOPES can we have that
the POLICE will bring the truth to the light???

NONE because the police( the FEDS ) ARE part
of this CRIME!

So, UNITED STATES , you ripped me off .

CONGRATULATIONS , you country of crooks !

You are excelent at ROBBING people that believed in you!
I hope EVERYBODY IN THE WORLD will NOW NEVER AGAIN PUT A
DOLLAR IN AMERICA!!!

My hope is Obama will win and put all the CROOKS
in JAIL!

USA, now doing bussiness like Mexico.

Wow, my wife has a 10,000 WM bond and we are just discovering what happened. We have a broker at Raymond James who has continued to advise us we hold onto all bonds so we do not lose money. Boy what idiots we are. Oh, by the way our broker has never bothered to discuss anything about this WM fiasco with us.

So, we are going to fire him on Monday and move all of our money out of his way. I personally can give better finance advice than that. So you think you have someone who is your advocate and they simply do nothing for you. How many other people are in this situation?

My elderly Dad noticed a drop in value of a fixed investment last week. Today he finally reached his financial adviser and learned that when he asked for a safe fixed deposit, his money was used to purchase a WAMU bond.

I have read thru this string & noticed several suggestions. I believe my Dad’s bond maturing in Jan 2009 makes him a senior bondholder. Is it too late for him to register with the FDIC & how do you do that?

Any help would be greatly appreciated.

I came about this site trying to get information for a client of mine who purchased WM bonds through another broker. My sympathy goes out to all of you. While all of you are trying to recover your loss there is another pot thats over-heating, GM, and Ford. Do not let our congress issue a bailout without addressing debt holders of these failed institutions. Before a dime is given to the companies they must met their debt obligations first, so bondholders can lend their capital to more stable institutions.

I am a bond holder also and just found this site and agree with all of the above. It sure puts a different value on corporate bonds as an asset class. Please let me know how I may join a class action suite against the FDIC and JPMorgan Chase in this case.

tp

Agreed. It will be a cold day in hell before I ever again buy a bond of any financial institution. It seems, even without this action by the FDIC, that the financial sector is inherently more risky that any other industry on account of the positive feedback build into market behavior both on the upside and the downside. This means that, all else being equal, comparable balance sheets from financiel institutions and any other corporation should NOT be rated equally. In fact, I am wondering if financial institutions ought to be allowed to issue bonds at all. Seems as if they do not behave like real companies. BTW, I got a letter back from the FDIC stating that:
“…Payments for these bonds were SUSPENDED (my emphasis) after the bank was closed. The FDIC has identified all of the debt instruments and we will be issuing Receivership Certificates to the Trustees/Paying Agents of these bondes in the near future. Receivership certificates serve as proof-of-claim against the failed financial institution. Currently it is unkown how much money will be available to distribute to the bondholders, or how long it will take to distribute remaining funds from the Receivership. However, any payments will be posted on our web site at:…fdic.gov/divweb/indes.asp. No additional information is required from you at this time.”

There, now doesn’t that make you feel better????

tony

Several Shareholders have gotten together and put up a website that tell the entire story about Washington Mutual, the seizure all the way up to the present. It is an excellent resource. When you read it, you will be amazed at just HOW wrong this deal was.

I encourage all to read it, and pass it on to their friends. There are a lot of misconceptions out in the general public about this issue…it is time they learned the TRUTH

http://www.wamustory.com

There IS some hope at this point…WEil and Gotshal have filed a lawsuit against the FDIC, and my money is on them, getting some remuneration…

I learned many years ago that investing in corporate bonds was not a guaranteed investment, if there was a failure the bondholders came first. Who changed the rules?? I guess the answer is that the only rule that matters is the Golden Rule… He who has the Gold, makes the rules.