Pacific Western Bank (PacWest) in Huntington Beach, California – Photo: REUTERS
Kennedy-Wilson Holdings Inc., a real estate investment group. announced it would purchase 74 loans at a discounted price of about $2.4 billion. Buyers will also assume all future financial obligations under these loans.
PacWest took steps to shore up its finances after deposits dried up, affecting some depositors in the region.
Of the loan book that PacWest is selling, more than half are real estate and land development loans.
PacWest will sell six more loans to Kennedy-Wilson for about $363 million if approved by shareholders, the Beverly Hills-based bank said.
Shares in the bank were up 12.5% in early trading on May 22 in New York.
Kennedy-Wilson expects to complete the acquisition in installments in the second quarter and early third quarter, with a total investment of 2.5-5% of the purchase price and future financing obligations. The loans carry a floating interest rate, averaging 8.4%.
The collapse of Silicon Valley Bank and several other regional banks has shaken similar banks across the United States. This has sent PacWest stock down nearly 80% since March 7th.
The Kennedy-Wilson Real Estate Investment Group is also headquartered in Beverly Hills, focusing its operations on the western United States, Great Britain and Ireland. The properties that the group manages are worth US$ 23 billion.
