PacWest to sell US$2.6 billion of real estate loans at discount
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PACWEST Bancorp, one of the regional US lenders that was engulfed in turmoil earlier this month, said it agreed to sell a US$2.6 billion portfolio of 74 real estate construction loans as part of its plan to shore up liquidity.
Kennedy-Wilson Holdings will buy the loans at a discounted price of US$2.4 billion, the company said on Monday (May 22). The buyer will also assume all future funding obligations of about US$2.7 billion.
Beverly Hills-based PacWest will also sell six more loans to Kennedy-Wilson for about US$363 million if it wins certain approvals, it said in a filing on Monday.
The collapse of Silicon Valley Bank and several other regional lenders has roiled similar firms across the US, causing shares of PacWest to plunge almost 80 per cent since March 7. Investors were concerned about big unrealized losses on bond investments at some firms, along with high exposure to real estate lending and sinking deposits as customers sought out higher-yielding alternatives.
PacWest announced it was in talks with potential investors and that it would sell assets to bolster its finances earlier this month. BLOOMBERG
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