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Rising real estate values, a dearth of inventory, historically low interest rates and an abundance of capital that needs to be deployed by institutional investors are all factors spurring bulk loan sales.
March 1
Popular (BPOP) has struck a deal to shed troubled loans from its balance sheet.
The $36.5 billion-asset parent of Banco Popular de Puerto Rico said Friday it would sell nonperforming commercial and construction loans for $347 million to a group of investors that includes Perella Weinberg Partners.
Popular will receive $112 million for the portfolio, which has a book value of $568 million. As part of the deal, Popular will retain a 24.9% interest in the acquiring company and extend roughly $268 million in financing to cover a portion of the purchase price, working capital and other expenses.
The deal is expected to slash the Popular's non-performing assets by roughly 28%.
"This transaction will substantially de-risk our balance sheet and improve future profitability," Richard Carrión, Popular's chief executive, said in a press release.
Goldman Sachs and the law firms of Mayer Brown and Pietdrantoni Mendez & Alvarez advised Popular on the deal.
