PacWest's Asset Auction

PacWest's Asset Auction

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  • PacWest Bancorp has sold a $3.5 billion asset-backed loan portfolio to Ares Management Corp. The portfolio, backed by consumer loans, mortgages, and timeshare receivables, was purchased by Ares's Alternative Credit funds. The first tranche of the deal closed last week, generating $2 billion in cash proceeds for PacWest before transaction costs. This move aims to boost liquidity and address concerns about deposit outflows.
  • PacWest, is bolstering its finances after deposit runs affected other regional banks. They sold a $5.7 billion loan portfolio to Kennedy Wilson Holdings Inc. and received $1.4 billion in financing from Atlas SP Partners, owned by Apollo Global Management. These actions aim to enhance PacWest's stability amidst recent bank collapses.

Why it matters

PacWest is not the only company seeking assistance from asset managers to reduce its balance sheet due to deposit outflows. In May, firms including Atlas SP, Angelo Gordon, Varde Partners, and Pagaya Technologies collaborated to acquire a pool of consumer loans from a US credit union, aiming to increase liquidity during a period of turmoil in the banking sector.


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