Diameter Capital's Goodwin sees value in failed Signature Bank's bonds, stock
Reuters
Published Apr 03, 2024 04:30PM ET
By Carolina Mandl
(Reuters) - Scott Goodwin, co-founder of credit asset management firm Diameter Capital, said he sees value in investing in bonds and stocks of failed Signature Bank (OTC:SBNY).
Goodwin said at the Sohn Conference, in New York, that recent joint-ventures sealed by the Federal Deposit Insurance Corp-run Signature with real estate investors such as Blackstone (NYSE:BX) are likely to allow the bank's securities to generate returns within five years.
In December, the FDIC sold 20% of its equity stake in a venture that holds a $16.8 billion real estate loan portfolio to some investors, including Blackstone Real Estate Income Trust.
Spain's Santander (BME:SAN) bought 20% of Signature's real estate portfolio for $1.1 billion from the Federal Deposit Insurance Corporation (FDIC) also in December.
Goodwin's firm has bought positions in the bank's securities.
The investor estimates that the market capitalization of Signature Bank will jump to over $600 million from current $145 million. He also sees Signature's bond prices more than doubling.
Goodwin said the joint ventures, like the one forged with Blackstone in December, are likely to manage assets in a way that there will be some money left for investors in Signature's securities in five years.
His thesis, he added, is not related to his optimism about the real estate market. "We're not bullish on CRE (commercial real estate). We're net short (CRE) as a firm."
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Written By: Reuters
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