IPO Possible for IndyMacs Reverse Mortgage Unit

IndyMac Bancorp Inc. is considering an initial public offering for its Financial Freedom Senior Funding Corp. as net income at the reverse mortgage unit doubled in the first quarter. The IPO would help attract and retain talent, raise cash and enhance shareholder value for Financial Freedom.

The Financial Freedom unit nearly doubled its net income from $4.2 million to $8 million in the first quarter of 2006. It funding $1.1 billion in reverse mortgages, compared to $507 million in the year-ago period.

Wachovia analyst Jim Shanahan assigned an estimated a value of $250 million to $400 million for Freedom Financial, based on a price-to-earnings multiple of 8-12, he said in a note to clients.

IndyMac paid about $80 million for a 94% stake in the firm back in 2004, Shanahan said.

Source: http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCFAD7068-6F93-4D50-B3F5-DA967D6BE278%7D

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