No Holiday for Distressed Asset Sales
NEW YORK (
) -- Firms did not take a breather from shedding distressed assets during the holiday weekend.
General Electric
(GE) - Get Report
sold off its Mexican consumer mortgage division to
Santander
(STD)
for $162 million and
Credit Suisse Group
(CS) - Get Report
sold off a $2.8 billion commercial-property loan portfolio to private equity group,
Apollo Management
for $1.2 billion.
The sales follow reports that
Bank of America
(BAC) - Get Report
is shopping
in home loans. Other banks such as
Citigroup
(C) - Get Report
and
Wells Fargo
(WFC) - Get Report
are
also reportedly shopping mortgage assets.
There are a several reasons the market is seeing sales of mortgage assets and commercial loans now, including the opportunity to take non-core assets off their balance sheets as a result of an improving market.
"The last two years the markets were frozen. Recently the markets have opened up so you are seeing some sales, but not a lot of bulk sales of debt," National Penn's CEO Scott Fainor told
TheStreet
. "There are more buyers in the market and a lot of loans are starting to be sold."
In addition valuations are also becoming more realistic, Jim Lockhart, vice chairman of
WL Ross & Co.
told
TheStreet
.
"Last year there were some real distressed sales that will probably turn out good for PE firms that made them, but there were a lot of sales that did not happen because price expectations were too high by the sellers," Lockhart said. "Now the sellers are being a little more realistic and maybe the buyers are being more realistic so they can price the assets better."
--Written by Maria Woehr in New York.
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