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KeyBank To Acquire Bank Of America CMBS Servicing Portfolio And Berkadia CMBS Special Servicing Business

Stocks in this article: KEY

CLEVELAND, May 9, 2013 /PRNewswire/ -- KeyBank Real Estate Capital, the commercial real estate business unit of KeyCorp (NYSE: KEY), announced today that it has entered into a series of agreements that will substantially increase its commercial mortgage servicing business.  Under the terms of an agreement with Bank of America, N.A., KeyBank has agreed to purchase certain commercial mortgage servicing rights from Bank of America. 

As of March 31, 2013, Bank of America had a total commercial mortgage servicing portfolio of approximately $110.5 billion.  The transaction also includes a CMBS special servicing portfolio of about $14 billion.

KeyBank will purchase substantially all of the third party CMBS and special servicing rights from Bank of America's Global Mortgages & Securitized Products business.   This portfolio also includes servicing for a variety of private investors, subject to investor consent.  We anticipate a seamless transition and closing of the transactions in the second quarter.  This transaction does not impact Bank of America's Commercial Real Estate Banking business. 

Upon completion of this transaction, KeyBank's commercial mortgage servicing portfolio will be among the top three largest named servicers of commercial/multifamily loans in the U.S., with a servicing portfolio of approximately $205 billion.  

Simultaneously, KeyBank has entered into a long-term sub-servicing agreement with Berkadia Commercial Mortgage LLC. Under this agreement, Berkadia will act as sub-servicer on all CMBS primary servicing acquired from Bank of America.  In connection with this agreement, KeyBank has also agreed to acquire Berkadia's CMBS special servicing business. 

On a pro forma basis, after closing the agreements with Bank of America and Berkadia, Key will be named special servicer on approximately $47 billion of CMBS, making Key the fifth largest CMBS special servicer.

Completion of the agreements with Bank of America and Berkadia are subject to obtaining any required consents from certain investors, rating agencies and regulators.

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