March 2, 2009 (FinancialWire) -- Flagstar Bancorp, Inc. (NYSE: FBC) (Current Market Cap: US$65.23 Mil.) said that an investment in the bank holding company of $25 million from MP Thrift Investments L.P. has closed.

The investment resulted in the issuance of 25,000 shares of Flagstar's convertible participating voting preferred stock, series B, which, subject to stockholder approval to increase the number of authorized shares of Flagstar common stock, will be convertible into 31,250,000 shares of Flagstar common stock at a conversion price of $0.80 per share.

MP Thrift is an entity formed by MP Global Partners III LLC, an affiliate of MatlinPatterson Global Advisers.

With the latest investment, MatlinPatterson has invested $50 million of a previously reported $100 million in equity capital that MatlinPatterson had agreed to purchase from Flagstar, which is in addition to a $250 million investment made by MatlinPatterson on January 30.

Flagstar said it anticipates that the final investment of $50 million from MatlinPatterson, in the form of trust preferred securities convertible into Flagstar common stock, will close in March, 2009.

Troy, Michigan-based Flagstar Bancorp operated 175 banking centers in Michigan, Indiana and Georgia and 104 home loan centers in 21 states at the end of last year. Flagstar Bank originates loans nationwide and is an originator of residential mortgage loans.

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