WaFd is selling roughly 2,000 commercial multifamily real estate loans to Bank of America for about $2.9 billion, the Seattle-based bank disclosed Friday in a filing.
The unpaid principal balance of the loans is roughly $3.2 billion in aggregate, according to the filing.
The transaction is set to close June 21 and, after that, Bank of America plans a structured transaction or loan sale with one or more funds managed or advised by Pimco, according to the filing.
WaFd isn’t the only bank looking to trim its commercial real estate exposure. New York Community Bank agreed last week to sell roughly $5 billion in mortgage warehouse loans to JPMorgan Chase. The bank’s CRE exposure was behind a surprise $252 million loss NYCB disclosed in January that sent its stock price into a tailspin. That, in turn, spurred a makeover in management, a $2.4 billion goodwill impairment charge and a $1.05 billion rescue by investors.
Regulators such as the Federal Reserve, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency said last year they would look more closely at banks whose CRE portfolios account for more than triple their capital, and at portfolios that have grown at least 50% in the past three years. WaFd has done both, according to Bloomberg.
WaFd and Bank of America will undergo due diligence through about June 18, and if either party fails to finalize the deal, the other is entitled to 1.5% of the aggregate purchase price for each loan, the filing indicated.
