FDIC Signature Bridge Bank, as the receiver, has recently completed a significant transaction by selling a 20 percent equity stake in an entity holding a massive $16.8 billion portfolio of commercial real estate (CRE) loans. This sale is one of the several transactions that followed the marketing of the $33 billion CRE loan portfolio after the failure of Signature Bank in New York.
Hancock JV Bidco L.L.C. (Hancock), which is indirectly controlled by Blackstone, Inc. and other investors, acquired the 20 percent equity interest in the newly formed entity known as SIG CRE 2023 Venture LLC (Venture). The FDIC-Receiver will retain the majority, an 80 percent equity interest, in the Venture. The FDIC-Receiver contributed approximately $16.8 billion in CRE loans collateralized by various properties such as office buildings, retail spaces, and market-rate multifamily properties. It’s important to note that the Venture does not hold any loans collateralized by rent-stabilized or rent-controlled multifamily properties.
As part of the deal, Hancock will take charge of managing, servicing, and liquidating the assets held by the Venture. They will be responsible for managing the portfolio in accordance with the terms of the transaction, while the FDIC-Receiver will provide comprehensive monitoring and oversight.
To facilitate the transaction, the FDIC-Receiver provided financing equal to 50 percent of the Venture’s value. As a result, the Venture issued a purchase money note to the FDIC-Receiver with an original principal amount of approximately $6 billion.
The FDIC-Receiver initiated the marketing process for this transaction in September 2023 and conducted it on a competitive basis. Qualified parties were given a seven-week due diligence period. Bidders had the option to bid on a 20 percent equity interest in the Venture along with financing or to acquire the CRE loans on a cash basis without financing. The objective of this transaction is to maximize the net present value of recoveries for the FDIC-Receiver.
The FDIC-Receiver is expected to announce the results of the rent-stabilized or rent-controlled multifamily loan portfolio transactions in the near future.
For more information on the FDIC-Receiver’s asset dispositions, please visit their website.
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Frequently Asked Questions:
What is the FDIC Signature Bridge Bank?
The FDIC (Federal Deposit Insurance Corporation) Signature Bridge Bank is a financial institution that became a receiver after the failure of Signature Bank, based in New York, New York. The FDIC acts as the receiver to resolve issues related to failed banks.
What is the significance of selling a 20 percent equity stake in the commercial real estate loan holding?
The sale of the equity stake allows the FDIC-Receiver to transfer part of the ownership and responsibility of the commercial real estate loan holding to Hancock JV Bidco L.L.C. (Hancock) and other investors indirectly controlled by Blackstone, Inc. This transaction aids in the management, servicing, and eventual liquidation of the assets, potentially maximizing recoveries for the FDIC-Receiver.
What types of properties are included in the commercial real estate loan holding?
The commercial real estate loan holding consists of loans collateralized by office buildings, retail spaces, and market-rate multifamily properties. It’s important to note that rent-stabilized or rent-controlled multifamily properties are not part of this portfolio.
Who will be responsible for managing the assets?
Hancock JV Bidco L.L.C. (Hancock) will take on the responsibility of managing the assets held by the newly formed entity, SIG CRE 2023 Venture LLC (Venture). They will oversee the management, servicing, and eventual liquidation of the assets in accordance with the terms of the transaction.
How much financing did the FDIC-Receiver provide for the venture?
In order to facilitate the transaction, the FDIC-Receiver provided financing equal to 50 percent of the Venture’s value. This financing resulted in the issuance of a purchase money note by the Venture to the FDIC-Receiver, with an original principal amount of approximately $6 billion.
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