Private Equity Blackstone & Canada Pension Plan Investment Board Acquire 20% Equity Stake for $1.2 Billion in New Joint Venture with United States FDIC to Hold $16.8 Billion of Senior Mortgage Loan Portfolio from Collapsed Signature Bank
16th December 2023 | Hong Kong
Private equity group Blackstone and Canada Pension Plan Investment Board (CPPIB) have acquired 20% equity stake for $1.2 billion in new joint venture with United States FDIC (Federal Deposit Insurance Corporation) to hold $16.8 billion of senior mortgage loan portfolio from collapsed Signature Bank (United States). In March 2023, The United States Department of the Treasury, Board of Governors of the Federal Reserve System (Fed) & Federal Deposit Insurance Corporation (FDIC) issued an official joint statement on the closure of Silicon Valley Bank & Signature Bank, with all depositors will have access to money (Monday 13/3/23), shareholders & unsecured debts are not protected, and no losses to be borne by taxpayers. Blackstone & CPPIB: “The FDIC is maintaining an 80% ownership stake in the venture and provided financing equal to 50% of the venture’s value. The commercial real estate loan portfolio comprises more than 2,600 first mortgage loans on retail, market rate multifamily and office properties primarily located in the New York metropolitan area. The loans are predominantly performing and encompass a wide range of credit profiles. Approximately 90% of the loans are fixed rate with low in-place coupons and strong in-place debt service coverage. Blackstone will be the lead asset manager of the portfolio and Rialto Capital will act as the loan servicer and operating partner. Blackstone is the largest owner of commercial real estate globally and has originated or acquired more than $170 billion of real estate loans and securities since the inception of its real estate credit business. Rialto Capital has oversight of over $100 billion of commercial real estate loans and has experience managing public private partnerships. CPP Investments invests in both public and private credit and credit-like products globally, leveraging its ability to provide scale, certainty of assets and a long investment horizon. As of September 30, 2023, CPP Investments’ credit portfolio totaled C$75 billion, including investments across corporate, consumer and real assets credit along the rating spectrum.” More info below:
“ Private Equity Blackstone & Canada Pension Plan Investment Board Acquire 20% Equity Stake for $1.2 Billion in New Joint Venture with United States FDIC to Hold $16.8 Billion of Senior Mortgage Loan Portfolio from Collapsed Signature Bank “
Jonathan Pollack, Global Head of Blackstone Real Estate Credit: “We are excited to invest in this compelling, large-scale opportunity on behalf of our BREDS and BREIT investors. Blackstone’s extraordinary real estate insights and credit expertise positioned us to underwrite approximately $17 billion of senior mortgage loans, allowing us to acquire the entire commercial real estate loan portfolio at an attractive basis. We look forward to working with our borrowers and our partners to maximize the potential of these assets.”
Geoffrey Souter, Managing Director, Head of Real Assets Credit at CPP Investments: “The current real estate credit market is a promising source of long-term returns for the CPP Fund and we look forward to exploring further opportunities to invest in this and other capital-constrained sectors. This opportunity builds on our longstanding partnership with Blackstone and is a testament to CPP Investments’ expertise in real estate credit, demonstrating our ability to transact quickly and at scale.”
Jay Mantz, President of Rialto Capital: “We are incredibly excited to invest in this historic opportunity with two of the most preeminent global investors, Blackstone and CPP Investments. The Rialto team has managed loans through multiple CRE market cycles, and we look forward to working with our partners to maximize value for all stakeholders.”
United States Official Statement on Closure of Silicon Valley Bank & Signature Bank: Depositors Will Have Access to Money, Shareholders & Unsecured Debts Not Protected & No Losses to be Borne by Taxpayers
16th March 2023 – The United States Department of the Treasury, Board of Governors of the Federal Reserve System (Fed) & Federal Deposit Insurance Corporation (FDIC) has issued an official joint statement on the closure of Silicon Valley Bank & Signature Bank, with all depositors will have access to money (Monday 13/3/23), shareholders & unsecured debts are not protected, and no losses to be borne by taxpayers. United States Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg: “ Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. We are also announcing a similar systemic risk exception for Signature Bank … … Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.” See full statement below.
United States Official Statement on Closure of Silicon Valley Bank & Signature Bank
12th March 2023 – Washington, DC — The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg:
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”
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