Blackstone nears deal for Signature Bank's $17 billion loan portfolio  |  Editor Nikhilesh Pawar

Published Nov 20, 2023 01:08PM ET

NEW YORK - Blackstone Inc. (NYSE:BX) is on the brink of acquiring a substantial $17-billion commercial property loan portfolio from the Federal Deposit Insurance Corporation (FDIC), as the aftermath of Signature Bank (OTC:SBNY)'s collapse continues to reshape the regional banking landscape. The deal, which is part of the FDIC's efforts to sell off assets from the failed bank, would mark a significant transaction for Blackstone, with shares having climbed 23.5% over the past six months and currently holding a Zacks Rank #3 (Hold).

The acquisition comes in the wake of Signature Bank's failure and subsequent issues at Silvergate Bank and Silicon Valley Bank (SVB), which have led to Silvergate's self-liquidation phase. In response to these banking disturbances, the FDIC appointed Newmark Group (NASDAQ:NMRK) to facilitate the offloading of approximately $60 billion in loans. While a subsidiary of New York Community Bancorp (NYSE:NYCB) absorbed parts of Signature Bank, it did not take on its full loan suite.

As part of the ongoing resolution process, Flagstar Bank acquired certain assets from Signature Bridge Bank N.A., including $25 billion in cash and other elements of the bank's portfolio, excluding digital assets and specific loans. The transaction featured a $2.7 billion discounted bid on net asset value. Additionally, First Citizens BancShares Inc. (NASDAQ: FCNCA) successfully took over Silicon Valley Bank following an auction that attracted 18 bidders and resulted in 27 bids.

The current transaction with Blackstone excludes rent-stabilized properties but includes a partnership with Rialto Capital for loan servicing, indicating a strategic approach to managing the acquired assets. The financial details of Blackstone's economic bid are being finalized with the FDIC.

The broader implications of Signature Bank's collapse have also prompted regulatory measures aimed at strengthening financial stability, with big banks now facing a requirement to replenish the government’s deposit insurance fund by an additional $15.8 billion over the next two years.

Blackstone's move to secure this loan portfolio aligns with its expansive investment strategy and could potentially enhance its position in commercial real estate lending amidst a period of market recalibration following recent banking sector challenges.

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The recent activities of Blackstone Inc. (NYSE: BX) align well with some key InvestingPro Tips. For instance, the firm has consistently maintained dividend payments for 17 consecutive years, providing a steady return for stockholders. In addition, Blackstone has a strong record of high return on invested capital, reinforcing its position as a solid investment.

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InvestingPro's real-time data highlights Blackstone's robust financial performance. The company boasts a substantial market cap of 123.46B USD, and its P/E ratio stands at a healthy 44.13. Furthermore, the firm has seen a large price uptick over the last six months, with a 6-month price total return of 28.42%.

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This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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