Credit Suisse offloading property loans: report
Credit Suisse is selling a 2.8-billion-dollar property portfolio in one of the largest bank sales of distressed loans since the 2008 financial crisis, the Wall Street Journal reported Friday.
The Swiss banking giant is to sell the portfolio for 1.2 billion dollars (913 million euros) to Apollo Management LP, the newspaper reported.
The loans were for apartment buildings in Germany and hotels in a number of European countries in areas hard hit by the economic crisis, it said citing sources familiar with the sale.
Credit Suisse declined to comment on the report when contacted by AFP.
Since the onset of the 2008 financial crisis there have been relatively few sales of distressed property loan portfolios by banks to private equity firms, who often later make large profits after restructuring the loans or seizing the properties.
The Wall Street Journal cited sources as saying the Credit Suisse had already written down the value of the portfolio and that the bank may share in any gains realised by Apollo as it is taking an equity stake in the company as part of the deal.
Credit Suisse had been heavily active in making property loans and then selling them on to other investors, but succeeded in reducing its exposure as the crisis approached.
It had 2.5 billion dollars in commercial property loans at the end of the third quarter of 2010, said the newspaper.
© 2010 AFP