Investment vehicles managed by private international investment firm Colony Capital have completed the acquisition of a portfolio of non-performing loans from BAG Bankaktiengesellschaft in Hamm, Germany.
Investment vehicles managed by private international investment firm Colony Capital have completed the acquisition of a portfolio of non-performing loans from BAG Bankaktiengesellschaft in Hamm, Germany.
The loans, all secured by commercial real estate, have a face value of $90 mln (EUR 61.5 mln).
BAG Bankaktiengesellschaft is part of the German cooperative banking system. BAG sold the portfolio to optimise its capacity for servicing and buying an expected influx of new non- and sub-performing loans from cooperative banks due to the economic crisis in Germany.
The transaction marks the first NPL acquisition in Europe for Colony during what it has described as the 'new distressed cycle'.
'We see significant opportunity for the next few years in underperforming and distressed assets all over Europe as traditional lenders continue to be affected by the worldwide downturn,' said Dilip Awtani, managing director, who heads Colony’s distressed efforts in Europe. 'There is enormous value in the underlying property in Germany and other European countries and we believe our strategy of working with bank partners will both help banks monetize their illiquid assets and position Colony to benefit from an eventual turnaround.'
Morgan Lewis was the legal and tax adviser for Colony on the transaction.
