Tuesday, February 9, 2010

FDIC Preps Massive Loan Offerings


February 5, 2010

The FDIC is unveiling three large portfolios of residential and hotel loans that it seized from failed banks. Another portfolio and possibly two more are said to be right behind them, but details of those could not be learned.

Deutsche Bank late last month, started distributing preliminary offering material for a portfolio of $420.1 million of performing and nonperforming hotel construction loans that were previously held by Silverton Bank of Atlanta.

And Stifel Nicolaus will soon launch marketing for two portfolios of residential mortgages. One will contain about $500 million of mixed-quality home loans and the other about $1 billion of nonperformers. Deutsche is expected to take offers for its portfolio on March 10, while.

Stifel could take offers for at least the $500 million portfolio by the end of March. The bid deadline for the larger portfolio probably won’t take place until April. Exactly how each offering will be structured is still being worked out, but the expectation is that FDIC will solicit offers for equity stakes of up to 40 percent while providing some level of financing. That model relies on elements of the federal government’s proposed public-private investment partnership, or PPIP, program.

Deutsche and Stifel are among 14 advisers FDIC tapped last November to spearhead the offering of failed bank assets through its structured portfolios. But they are among only six that have so far handled nine such portfolios totaling $11.8 billion.

Stifel previously handled the sale of a stake in a $560 million portfolio of mixed-quality home loans to PennyMac, while Deutsche previously handled the sale of a stake in a $1 billion portfolio of mixed-quality commercial mortgages to a Colony Capital

The Deutsche portfolio, which is farther along than the offerings Stifel is working on, is comprised of construction loans against hotels that Silverton originated through its Specialty Finance Group operation. That unit had lent against projects such as the W Hotel Downtown in Atlanta, for which it provided $85 million, and the Landmark Hotel in Charlottesville, Va., to
which it committed $23.7 million.

The portfolio will be divided into two components, one containing 22 whole loans with a balance of $162.4 million and the other having 41 loan participations with a balance of $257.7 million.