March 6 (Reuters) – New York Community Bancorp (NYCB.N), opens new tab said on Wednesday it had raised $1 billion from investors including former U.S. Treasury Secretary Steven Mnuchin’s Liberty Strategic Capital and named a former Comptroller of the Currency its new CEO.
Investment firms Hudson Bay Capital, Reverence Capital Partners, Citadel Global Equities, other institutional investors and certain members of the bank’s management also participated in the equity investment, according to NYCB.
The bank’s stock had a rollercoaster session, falling 45% prior to the announcement, bouncing 30% higher after finally closed 7.4% higher. KBW’s analyst Chris McGratty said in a note to clients that the capital raise is painful for existing shareholders but should reduce fear of systemic risks.
“This is a good solution for the broader system, shows ability to attract private capital, and the management and board overhaul provide credibility with investors”, McGratty wrote. He believes the bank may still sell assets and transfer credit risk to further increase its capital ratio above the current 10% target.
