Roc360 will buy PacWest Real Estate lending firm!
Hi HODLers and Hiveans,
This is the thing that I am watching closely. How will underwater regional banks deleverage their balance sheet and get rid of their commercial real-estate without taking too much of a haircut.
PacWest has been crushed year to date as it is down more than 65%. They pumped a bit on Monday as they announced that they would sell 74 real-estate construction loans totaling $2.6 billion. It was very hard to find at which price they sold this portfolio but it seems they did take a loss of 7-8% on these assets.
Let's remember, they took a loss of 7-8% on the asset price which is a much bigger loss of their "profit".
Roc360 announced it will buy Civic (PacWest Real Estate lending business). Civic was bought by PacWest in 2021 to expandand diversify its revenue stream...
Roc360 will take its operations, data, IP, brand and workforce BUT it will not take Civic's previously extended loans or loan-servicing operations.
So, if I sum-up: They are not taking the previous loans at low interest rates on overpriced assets.
This screams that PacWest is completely underwater and desperate to provide the illusion that they are deleveraging.
Another red flag: NO PRICE has been communicated.
Conclusion: The Regional Banks Saga has still a lot of episodes to be played out...
I would love to have your view! @scaredycatguide might have some insights?
Stay safe out there!
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