FDIC Signature Bridge Bank Receivership Sells 20 Percent Equity Interest in Entity Holding $16.8 Billion of Commercial Real Estate Loans
Signature Bridge Bank, a failed financial institution, has announced the sale of a 20 percent equity stake in an entity holding $16.8 billion of commercial real estate (CRE) loans. The Federal Deposit Insurance Corporation (FDIC) served as the receiver of Signature Bridge Bank and facilitated the transaction.
The Sale Transaction
Hancock JV Bidco L.L.C. (Hancock), an entity controlled by Blackstone, Inc. and other investors, has acquired the 20 percent equity interest in SIG CRE 2023 Venture LLC (Venture). Venture is a newly formed entity owned by the FDIC-Receiver, with the FDIC-Receiver retaining an 80 percent equity interest in the Venture. In this transaction, Hancock paid $1.2 billion for their equity stake.
The FDIC-Receiver contributed approximately $16.8 billion worth of 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.
Under the terms of the transaction, Hancock will assume responsibility for managing, servicing, and liquidating the assets held by the Venture. The FDIC-Receiver will closely monitor and oversee Hancock’s management of the portfolio to ensure compliance with the agreed-upon terms.
Financing and Asset Disposition
As part of the transaction, the FDIC-Receiver provided financing equal to 50 percent of the Venture’s value. This 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.
The marketing process for this transaction began in September 2023, with a competitive bidding process for qualified parties. Bidders had the option to bid on a 20 percent equity interest in the Venture with optional financing or to acquire the CRE loans on a cash basis without financing. The goal of the 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.
Frequently Asked Questions
What is the FDIC-Receiver?
The FDIC-Receiver is the entity responsible for handling the assets and liabilities of a failed bank or financial institution. In the case of Signature Bridge Bank, the FDIC served as the receiver and facilitated the sale of a portion of the bank’s CRE loan portfolio.
Who is Hancock JV Bidco L.L.C.?
Hancock JV Bidco L.L.C. is an entity indirectly controlled by Blackstone, Inc. and other investors. They have acquired a 20 percent equity stake in SIG CRE 2023 Venture LLC, the entity holding the $16.8 billion CRE loan portfolio.
What types of properties collateralize the CRE loans in the portfolio?
The CRE loans in the portfolio are collateralized by office buildings, retail spaces, and market-rate multifamily properties. The Venture does not hold any loans collateralized by rent-stabilized or rent-controlled multifamily properties.
What is the goal of the transaction?
The goal of the transaction is to maximize the net present value of recoveries for the FDIC-Receiver. By selling a portion of the CRE loan portfolio to Hancock JV Bidco L.L.C., the FDIC-Receiver aims to recoup as much value as possible from the failed bank’s assets.
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