Federal authority seeks potential purchasers for a sum of $18.5 billion in loans belonging to Signature Bank.
In a series of developments, Signature Bank's commercial real estate loans are set to be sold, and the sale of the bank's $18.5 billion loan portfolio to unspecified bidders remains unrelated.
The Federal Deposit Insurance Corporation (FDIC) announced the sale of the $18.5 billion loan portfolio from Signature Bank on July 25. The closing for this sale is scheduled for October 2. However, the specific commercial real estate loans that will be sold have not been specified as of yet.
Newmark Group has been appointed as a financial advisor to help the FDIC sell the $60 billion in loans retained in its receivership. In a separate move, Newmark is preparing to launch a sale of Signature's commercial real estate loans, although a timeline for this sale has not been established.
The loans in question are subscription credit facilities to private equity funds, collateralized by liens on capital call rights and business assets. Eligible bidders must be FDIC-insured depository institutions or us bank and must certify that they are not competitors of the borrowers.
Meanwhile, the majority of Signature's assets were purchased by New York Community Bank subsidiary Flagstar for $2.7 billion. The purchase licensing rights are not mentioned in relation to the sale of Signature's assets or loans.
The shutdown of Signature Bank occurred in March, and the sale of the loan portfolio has attracted interest from several FDIC-insured banks, including JPMorgan Chase, Citibank, and pnc bank. The firms reportedly include Starwood Capital Group, Carlyle Group Inc., Blackstone Inc., Thoma Bravo, and Brookfield Asset Management Ltd.
It's important to note that the loans are subject to change in size and composition. The sale of Signature's commercial real estate loans is not related to the sale of the $18.5 billion loan portfolio to unspecified bidders.
The loans will be offered in four pools, each consisting of whole loans, non-lead syndicated loans, and lead syndicated loans. The closure of Signature Bank was attributed to poor management, but the impact of this on the loans remains to be seen. Bidders must ensure they meet the eligibility criteria and comply with the certification requirements to participate in the sale.
