Doral sells $824.4M in non-performing assets at discount
Doral Bank continues shedding non-performing assets. (Credit: © Mauricio Pascual)
Doral Financial Corp. announced Monday it had entered into an agreement to sell some $824.4 million in non-performing loans to Abbey Finance Holdings PR, LLC, for a discounted amount of $369 million.
The portfolio is broken down into $623.8 million of residential mortgage loans and residential real estate owned properties and $200.6 million of commercial mortgage loans and commercial REO properties, the bank said. Abbey will pay $293.8 million for the residential assets and $75.2 million for the commercial assets.
The move will reportedly allow the bank to improve its financial position — by reducing risk and improving its liquidity — and move forward with the rest of its restructuring plan.
“This transaction is a key component of our plan to strengthen the Company by restructuring our balance sheet. Eliminating these non-performing assets goes a long way to achieving our goals by reducing our risk exposure, improving our liquidity, reducing our carrying costs of problem assets, and putting our Company in a better position to complete our transformation,” said Glen Wakeman, Doral Financial Corporation CEO.
“Shedding a significant part of our portfolio that was not performing adequately makes us leaner and stronger so that we may move forward with our restructuring plans while we continue to serve our clients and fulfill our commitments to our employees and shareholders,” he said.
The company’s Board was advised by Houlihan Lokey. The closing of the transaction is subject to regulatory approval.
