Wednesday, December 29, 2010

FDIC Sells Four Loan Portfolios Totaling $1.22 Billion

By Mark Heschmeyer

December 27, 2010
In the first deal, the FDIC sold a 40% equity interest in a newly- formed limited liability company created to hold assets with an unpaid principal balance of approximately $204 million from 12 failed bank receiverships. 

The winning bidder of the FDIC Multibank CRE Venture Loan and REO Structured Transaction 2010-2, Northern Pool was ColFin Milestone North Funding LLC, a consortium of investors organized by Los Angeles-based Colony Capital. The purchase price was 27% of the unpaid principal balance. The Cogsville Group LLC of New York is minority-owned and partnered with Colony. 

As an equity participant, the FDIC will retain a 60% equity interest in the LLC and share in the returns on the assets. The FDIC offered 1:1 leverage financing to the LLC, which will issue to the FDIC purchase money notes of $28.5 million. The sale was conducted on a competitive basis with the FDIC receiving bids for either a 40% ownership interest or a 20% ownership interest in the LLC. 

The FDIC as receiver for the failed banks will convey to the LLC a portfolio of approximately 557 distressed commercial real estate loans, of which more than 50% are non-performing. Collectively, the loans have an unpaid principal balance of approximately $204 million. About 82% of the collateral in the portfolio is in Michigan. As the LLC's manager, Colony will manage, service, and ultimately dispose of the LLC's assets. 

All of the loans were from banks that failed during the past 20 months. 

In a second deal, the FDIC closed on a sale of a 40% equity interest in a newly- formed limited liability company created to hold assets with an unpaid principal balance of approximately $137 million from five failed bank receiverships. 

The winning bidder of the FDIC Multibank CRE Venture Loan and REO Structured Transaction 2010-2, Western Pool is Colony Milestone Co-Investment Partners LP, a consortium of investors also organized by Colony Capital. The purchase price was 60.10% of the unpaid principal balance. The Cogsville Group again partnered with Colony. 

As an equity participant, the FDIC will retain a 60% stake in the LLC and share in the returns on the assets. 

The FDIC offered 1:1 leverage financing to the LLC, which will issue to the FDIC, as receiver, purchase money notes of $42.6 million. The sale was conducted on a competitive basis with the FDIC receiving bids for either a 40% ownership interest or a 20% ownership interest in the LLC. 

The FDIC as receiver for the failed banks will convey to the LLC a portfolio of approximately 198 distressed commercial real estate loans, of which more than 38% are non-performing. Collectively, the loans have an unpaid principal balance of approximately $137 million. About 78% of the collateral in the portfolio is in Utah. Colony will manage, service, and ultimately dispose of the LLC's assets. 

In a third deal, the FDIC sold a 40% equity interest in a newly-formed limited liability company (LLC) created to hold assets with an unpaid principal balance of approximately $279 million from nine failed bank receiverships. The winning bidder of the Western Residential Acquisition and Development pool of the 2010-2 Multibank Structured Transaction was Cache Valley Bank in Logan, UT, with a purchase price of 22.22% of the unpaid principal balance. 

As an equity participant, the FDIC will retain a 60% stake in the LLC and share in the returns on the assets. The FDIC offered 1:1 leverage financing to the LLC, which will issue to the FDIC a purchase money note of $30.6 million. The sale was conducted on a competitive basis with the FDIC receiving bids for either a 40% ownership interest or a 20% ownership interest in the LLC. 

The FDIC as receiver for the failed banks will convey to the LLC a portfolio of approximately 761 distressed residential acquisition and development loans, of which more than 50% are delinquent. Collectively, the loans have an unpaid principal balance of approximately $279 million. About 81% of the collateral in the portfolio is in Utah, Arizona, California, and Nevada. Cache Valley will manage, service, and ultimately dispose of the LLC's assets. 

All of the loans were from banks that failed during the past 14 months. 

Lastly, RoundPoint Financial Group purchased a 40% stake of a $603 million mortgage loan portfolio from the FDIC in conjunction with RBS Financial Products Inc. 

The FDIC retains a 60% equity interest in what is a newly created venture that will acquire the pool of mortgages. RoundPoint Capital Group and RoundPoint Mortgage Servicing Corp. will oversee the management and servicing of all loans in the portfolio.