BofA Plans to Sell Nearly $1 Billion in Commercial Loans

Bank of America Corp. reportedly plans to sell a commercial real estate loan portfolio worth $880 million–at a discount of 20-25 percent from face value–to a group of investors, Reuters News reports.

“The portfolio includes current and delinquent loans tied to 32 properties of various types, including office properties and even senior housing in 15 states,” the Reuters News article notes, quoting an unnamed source familiar with the deal.

Bank of America holds a $44 billion commercial real estate portfolio and this latest move shows a strong desire to unload some of its commercial loans as it looks to boost its capital levels after steep mortgage losses, Reuters reports. Analysts speculate that the bank will likely need to raise as much as $50 billion in capital to overcome its home loan losses.

Other banks also have been selling off commercial loan properties in recent months. The largest to-date was last month with Anglo Irish Bank Corp’s sale of a $9.5 billion portfolio of U.S. commercial real estate loans.

Source: “BofA to Sell $880 Million in Commercial Real-Estate Loans,” Retuers (Sept. 22, 2011)

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