Inventory
info icon
Single family homes on the market. Updated weekly.Powered by Altos Research
731,017+5,768
30-yr Fixed Rate30-yr Fixed
info icon
30-Yr. Fixed Conforming. Updated hourly during market hours.
6.36%0.02

Indymac CEO Suggests 2008 Profitability After Fitch Cuts Thrift to Junk

Fitch Ratings on Thursday cut Indymac Bancorp Inc.’s long-term issuer default rating on $440 million in debt to ‘BB’ from ‘BBB-,” citing continued weakness in the residential mortgage market and the “virtual absence” of a private secondary market. The cut moves IndyMac’s debt to junk status, and follows a move by Standard & Poor’s in January to cut the thrift’s counterparty credit rating to below investment grade. At the time of the S&P downgrade, Indymac spokesperson Grove Nichols said the ratings cut would have “no practical impact” on its business. No such statement was made in the wake of Fitch’s ratings cut Thursday, although CEO Michael Perry granted an interview to Bloomberg that suggested the Pasadena, Calif.-based thrift expects a possible return to profitability this year — and allowed him to throw around information on rate-lock volume. Via Bloomberg:

“I think we’ll have a good shot of returning to profitability for the rest of the year in ’08,” Perry said. “Not a lot of profitability, but profitability.” … Declines in 30-year fixed-rate mortgage rates to the lowest since mid-2004 have caused applications for refinancing to surge, Perry said. “It’s been a long, long time since we had a rate-lock day like yesterday,” he said. “We rate-locked over a billion [dollars worth] of loans.”

Indymac shares jumped nearly 25 percent on Perry’s outlook, rising to $5.43 in very heavy trading to close Thursday’s session; the shares continued to climb an additional 26 percent in after-hours trading to $6.83. Disclosure: The author held no positions in IMB at the time this story was published.

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please