Corus Bank Assets Sold for $550M: Report

CHICAGO (TheStreet) -- A group led by Starwood Capital won the bidding for the assets of failed Chicago-based Corus Bank, the Financial Times reports.

The group made an aggressive offer taking advantage of a complex financing package which was drafted by the Federal Deposit Insurance Corp. The deal's purchase price of $550 million values the assets, mostly non-performing construction loans on unfinished buildings, at $2.5 billion which is almost half the face value of its loans of $5 billion, the newspaper reports.

The FDIC package will not only entitle the winning group to receive a management fee of around $40 million to meet expenses, but also will provide access to about $1 billion in interest-free financing from the FDIC, loans at a subsidized rate and a revolving line of credit.

The buyers, which also include Wilbur Ross, hedge fund Perry Capital and private- equity firm TPG, will take 40% of a newly created limited liability corporation that will buy the assets, while the remaining 60% will be taken by FDIC. Notably, none of the parties will be able to reap any profits until FDIC is repaid on its loans.

Corus Bank, a unit of Corus Bankshares(CORS), was shut down last month by the Office of the Comptroller of the Currency. The FDIC was appointed receiver and sold the failed bank's deposits and branches to MB Financial Bank, a subsidiary of MB Financial(MBFI).

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