UPDATE: FDIC Sells Starwood-Led Group 40% Of Corus Asset Pool
October 06 2009 - 7:20PM
Dow Jones News
A consortium led by Starwood Capital Group purchased a 40%
equity stake in a $4.5 billion pool of construction and real-estate
loans left over from Corus Bank's failure last month, federal
regulators said Tuesday evening.
The Federal Deposit Insurance Corp. said the assets are
effectively being valued at 60 cents on the dollar, and as part of
the deal the agency will retain a 60% stake in the portfolio of
both performing and nonperforming loans. The transaction is being
done on a 1-to-1 leverage basis, with equal shares of debt and
equity of nearly $1.39 billion.
The FDIC will guarantee the debt issued as part of the
transaction, and will provide a $1 billion credit facility to
provide cash flow for the completion of some of the real-estate
projects included in the portfolio.
The Starwood-led consortium, which was one of eight bids
submitted for the portfolio, is also made up of TPG Capital, Perry
Capital and WLR LeFrak. The FDIC said the deal is expected to close
Oct. 15.
Documents released by the FDIC said the agency's 60% stake in
the portfolio is worth $831.6 million. Barclays Capital advised the
FDIC on the transaction.
-By Michael R. Crittenden, Dow Jones Newswires; 202-821-2159;
michael.crittenden@dowjones.com