Banco Popular de Puerto Rico has completed the sale of its portfolio of construction and commercial real estate (CRE) loans with an unpaid principal balance and net book value of approximately $358 million and approximately $148 million, respectively. The purchaser is a newly created joint venture that is majority owned by a limited liability company to be created by Goldman Sachs & Co., Caribbean Property Group LLC and East Rock Capital LLC.
According to the bank, the loans were sold at a price essentially equal to their book value, and Banco Popular will not recognize any significant gain or loss on the sale. Approximately 97% of the loans sold were classified as nonperforming loans. As consideration for the sale of the loans, Banco Popular will receive approximately $48 million in cash, a note for approximately $86 million as seller financing and a 24.9% equity interest in the new joint venture.
‘This transaction is an important step – one of several initiatives the corporation is pursuing to continue to de-risk its balance sheet,’ says Richard Carrion, chairman and CEO of Popular Inc., the San Juan-based parent company of Banco Popular.
