Bank loan assets are finding themselves on the market, whether the FDIC expecting to sell the $60 billion worth retained from the Signature Bank closure sometime this summer, or PacWest selling 74 construction loans to Kennedy-Wilson Holdings for $2.4B, a discount of $200M.
With increased pressure on CRE loans and greater numbers of assets becoming distressed in the near future, there's no reason to think that the discounting has ended. That could pose big systemic problems, as Arkhouse managing partner Gavriel Kahane tells GlobeSt.com.
He worries that if any of these portfolios go for too little, it could "create a domino effect for other regional banks currently holding risky CRE loans."
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