Capital One Financial (COF) agreed to buy ING Direct USA for $9 billion in cash and stock. The deal moves Capital One up the list of the country's largest banks by deposits to fifth from eighth. The financial services provider also agreed to assume 20% of the ING Direct USA portfolio of Alt-A mortgages not covered by an agreement with the European Commission, which bailed out ING Group (ING) in 2008. The Dutch financial firm was forced to sell the U.S. unit as part of the bailout. Jan Hommen, chief executive of ING Group, said the transaction "shows ING is taking decisive steps in the restructuring of ING Group and underlines our commitment to meet the requirements of the EC in a prudent yet decisive manner." The sale enables ING Direct USA to amend an agreement with the Dutch government that resulted from the 2008 bailout. To ensure continued alignment between the interests of ING and the Dutch regarding the Alt-A portfolio of unit acquired by Capital One, ING will provide a counter guarantee to the state covering one-fourth of the 80% stake the Dutch hold in the portfolio. The guarantee will cover cash losses if they exceed 35% that is implied by the current market value of the portfolio, which lowers risk for the government, according to ING. ING gets a 10% stake in Capital One and the right to one director on the company's board, as per the deal, which is expected to close by the end of 2011. Write to Jason Philyaw.