FDIC Structured Sales: Timing (and Leverage) Is Everything

Since 2008 the FDIC has sold an estimated $22.02 billion in failed bank loans in 19 structured sales transactions.

 

Loan type seems to be much less a factor on the price paid for the failed bank loans

	Loan Type	Book Value (Millions)	Price/Book Value	% of Total Sales Activity
Subtotal	Acquisition Development or Construction Loans (SFR,CRE etc.)	$15,559	40%	71%
Subtotal	Commercial Real Estate Loans	$2,877	54%	13%
Subtotal	Single Family Residential Loans	$3,584	48%	16%
Total/Avg		$22,020	44%

than the timing and leverage of the transactions.  Early deals closed in early 2009 were done in the midst of the crisis and were not yet financed by the FDIC.

Date Sold	Loan Type	Book Value (Millions)	Leverage	Price/Book Value
5/6/2008	Single Family Construction and Lot Loans	$146	N/A	32.80%
12/29/2008	Single Family Residential	$561	N/A	38.60%
1/12/2009	Acquisition Development and Construction ("ADC") Loans	$1,120	N/A	9.00%
2/5/2009	Residential Construction	$733	N/A	22.00%
2/20/2009	Commercial Construction	$702	N/A	29.20%
3/19/2009	Consumer Construction, Homebuilder Construction, Lot Loans	$1,652	N/A	16.40%
Total/Avg: First Deals (All Cash)		$4,914		20.40%
9/30/2009	Single Family Residential	$1,320	6 to 1	64.80%
10/16/2009	Commercial Construction	$4,451	1 to 1	62.50%
1/7/2010	Commercial Real Estate	$1,028	1 to 1	44.70%
2/9/2010	Residential ADC	$2,253	1 to 1	38.60%
2/9/2010	Commercial ADC	$799	1 to 1	45.70%
4/1/2010	Single Family Residential	$491	2 to 1	42%
5/18/2010	Commercial RE, Construction and ADC	$421	1 to 1	82.30%
6/25/2010	Single Family Residential	$314	1 to 1	35.40%
7/2/2010	Commercial Real Estate	$1,849	1 to 1	59.90%
7/9/2010	Single Family Residential	$898	1 to 1	37.40%
7/21/2010	Commercial ADC	$1,703	1 to 1	40.80%
8/26/2010	Residential/ Commercial ADC	$762	1 to 1	34.70%
Announced, Not Closed	Residential/ Commercial ADC	$817	1 to 1	23.60%
Total/Avg: Financed Deals		$17,106		50.22%