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- WaFd Bank Completes Sale of $2.8 Billion in Multi-Family Loans
WaFd Bank Completes Sale of $2.8 Billion in Multi-Family Loans
Slice of Real Estate Team
June 26, 2024
Key Highlights:
$2.8 billion multifamily CRE loans sold to Bank of America.
Transaction executed at 92% of principal balance.
Sale provides immediate liquidity for WaFd Bank.
Largest non-FDIC assisted CRE loan sale ever.
Options for WaFd include debt buy-down, new loans, and stock buyback.
Source (Business Wire)
Notable Quote
"This should prove to the investment community that the sky is not falling when it comes to CRE loans. These are high quality loans and we believe the purchase price is reflective of the low amount of credit risk in the portfolio. Further, this sale was executed at 92-percent of principal balance. That discount is almost entirely attributable to changes in interest rates not the quality of these CRE loans."
Our Take:
The recent sale of $2.8 billion in multifamily commercial real estate loans by WaFd Bank to Bank of America, subsequently managed by PIMCO, signifies a robust affirmation of the quality of these assets. The transaction, conducted at 92% of the principal balance, underscores the minimal credit risk associated with the portfolio, as highlighted by CEO Brent Beardall. This move not only dispels concerns surrounding CRE loans but also strategically enhances WaFd Bank's liquidity, providing them with flexible options for future financial maneuvers such as debt reduction, loan origination, or stock repurchase. This landmark non-FDIC assisted sale is a testament to the bank's strong asset management and prudent financial strategies.