Banco Popular de Puerto Rico announced Monday it completed the previously announced sale of a portfolio of non-performing commercial and construction loans, and commercial and single-family real estate owned, with a combined unpaid principal balance on loans and appraised value of other real estate owned of approximately $995 million and book value of approximately $540 million to an entity majority owned by a joint venture between Caribbean Property Group LLC and certain affiliates of Perella Weinberg Partners’ Asset Based Value Strategy.
As part of the transaction, Banco Popular will acquire a 24.9 percent equity interest in the purchasing entity.
The purchase price for the assets was approximately $338 million, or 34 percent of the sum of the unpaid principal balance of the loans and the appraised value of the other real estate owned as of the agreed cut-off date, adjusted for certain collections and advances.
As previously announced, the transaction will significantly reduce Popular’s non-performing assets and credit-related expenses.
The transaction is expected to result in an after-tax loss of approximately $179 million, which will be recognized in the first quarter of 2013.
This transaction is similar to another completed in September 2011, when Popular sold a portfolio of mostly non-performing construction and commercial real estate loans with a book value of about $148 million to a joint venture by Goldman Sachs & Co., Caribbean Property Group LLC and East Rock Capital LLC.