Supported a National Bank’s $1.5 Billion Loan Portfolio Sale, Reducing Risk and Streamlining Its Balance Sheet

A major national bank sought to reduce its CRE loan exposure by divesting a $1.5 billion portfolio of more than 350 multifamily loans, primarily concentrated on the East Coast. The bank was concerned with the potential risk associated with these loans on its balance sheet, and sought to streamline its holdings and focus on clients with stronger financial ties. This strategic decision came during a volatile post-COVID market, making the need for expert support and diligence crucial to a successful sale. 
 

SitusAMC was engaged to provide diligence, data set-up and transactional support for the loan portfolio sale. Over a six-week period, the team prepared detailed data tapes compiling loan and property metrics, including debt coverage ratios, loan-to-value (LTV) calculations and guarantor information. SitusAMC compiled and aggregated the data from source documents across different internal systems, confirming accuracy and tracking down any missing data. The team also set up and maintained the data site that housed all the loan files and diligence shared with bidders; and maintained loan document inventory checklists, which are instrumental in supporting an efficient closing process. 

SitusAMC also identified strengths to emphasize in individual loans, and helped to mitigate items that might be negatively perceived by providing more context through supplemental schedules. The team produced cash flow analyses and asset summary reports for the 25 largest loans, ensuring the transaction was presented in the best possible light. Throughout the process, which included two phases of bids, SitusAMC worked closely with the bank and bidders, managing the Q&A process and participating in key management meetings.

Despite the turbulent market environment, SitusAMC’s expertise and diligence empowered the national bank to successfully divest the $1.5 billion loan portfolio at a price above initial expectations, working in partnership with the deal broker to facilitate the strong execution and exceptional outcome. The Q&A process allowed the seller to quickly address any bidder concerns, while SitusAMC’s asset summaries and supplemental reports helped mitigate potential risks. The bank secured par bids, effectively reducing its risk exposure and streamlining its balance sheet in alignment with its strategic objectives.