FDIC Announces Deal On $898M AmTrust Bank Portfolio

deral Deposit Insurance Corp. (FDIC) has [link=http://fdic.gov/news/news/press/2010/pr10160.html]closed[/link] on a sale of 40% equity interest in a limited liability company (LLC) created to hold approximately $898 million of primarily non-performing residential loan assets out of AmTrust Bank, which failed on Dec. 4, 2009. The winning bidder of the structured transaction is a three-party consortium made up of Residential Credit Solutions Inc., CarVal Investors and RBS Financial Products Inc. at a price of approximately 37% of unpaid principal balance. The FDIC, as receiver for the failed bank, will convey to the LLC a portfolio of approximately $898 million residential real estate loans, of which approximately 96% are delinquent. Thirty-seven percent of the collateral in the portfolio is located in Florida; 11% in California; 5% in each of Arizona, Nevada and Massachusetts; and the balance in 42 other states. As an equity participant, the FDIC will retain a 60% stake in the LLC and share in the returns on the assets. The FDIC offered 1:1 leverage financing and has agreed to guaranty Purchase Money Notes issued by the LLC in the original principal amount of approximately $169.5 million. The sale was conducted on a competitive basis with the FDIC receiving a total of five bids on either a 40% leveraged ownership interest or a 40 percent unleveraged ownership interest in the newly formed LLC. SOURC


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