Analysis of CapitalSource: Part IV
Dan Wieman submits:
Over the past several days, I’ve looked at CapitalSource Bank, CapitalSource’s Health Care Real Estate Portfolio, and CapitalSource’s equity in securitization residuals. The equity in each component of these businesses is $916 million, $650 million, and $910 million respectively. All of this for a company with a market capitalization of less than $500 million.
From a liability perspective, only the securitization residuals have required any capital. Despite the $4.6 billion in loan assets being match funded by approximately $3.6 billion in loans within six separate special purpose entities, CapitalSource has in the past purchased $162 million in problem loans from these trusts to preserve the credit quality of these issues. So the question remains, why is CapitalSource priced at such a small fraction of their book value?
