With the doom-and-gloom view of bank CRE loans, you might assume that any sell-off of loans would come at a significant discount.
Not necessarily as the Valley National Bank sale of almost $1 billion in CRE loans to Brookfield Asset Management shows. The bank announced it had “closed on the sale of a diverse pool of performing commercial real estate mortgage loans.” The price tag was discounted by about 1% from par value.
But that amount is not even enough of a discount for a company to pay a vendor a little sooner than 30 days. It’s more a courtesy to the buyer. Plus, Valley keeps the servicing responsibilities, so over time chances are they’ll more than make up that trifling discount.
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