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Secondary Transaction Journal

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Among several recently announced secondary transactions are performing and non-performing commercial and residential portfolios. Meanwhile, a new buyer of mortgage-backed securities has emerged, and a mortgage marketplace has grown by one player.

FirstMerit Corp. announced last month that it agreed to acquire $1.2 billion in deposits and 24 Chicago-area branches from First Bank. In conjunction with that transaction, Akron, Ohio-based FirstMerit agreed to acquire $415 million in asset-based loans from a First Bank affiliate in two separate transactions.

One deal includes $315 million in performing loans to be purchased at par. A second deal involves the discounted purchase of $104 million in loans. Around 8 percent of the combined loan purchases are commercial real estate loans, while 8 percent are consumer loans.

The asset-backed loan business expands FirstMerit’s Midwest presence. The loan acquisition is expected to be completed by the end of the year.

Mission Capital Advisors LLC issued a November announcement indicating it was offering a $120 million portfolio of commercial mortgages secured by properties in the New York area. Multiple available pools include performing, sub-performing and non-performing loans secured by a mix of property types.

Mission said final bids are on Dec. 10.

AEGON USA Realty Advisors unloaded 19 performing commercial mortgages for $79 million through the loan sales group of Holliday Fenoglio Fowler, L.P., a recent statement said. The loans are secured by a mix of properties including retail, office and multi-housing properties in 11 states.

“The loans were sold to one institutional investor at pricing that ranged between a modest discount to a slight premium over par,” Holliday said. “The loans are well-underwritten and well-performing and the sale was motivated by a desire of the seller to slightly re-balance its portfolio.”

A $48 million portfolio of commercial mortgages secured by a West Bloomfield, Mich., multifamily property and a Denver office building is also being marketed by Mission, though final bids were yesterday. The commercial mortgage-backed securities special servicer that is selling the loans recently closed on another sale through Mission.

Nonperforming commercial real estate loans for around $32 million were sold by Sterling Bancshares Inc. a Nov. 2 news release indicated. The Houston-based firm said it was motivated to sell as a result of deterioration in the real estate market and continued uncertainty about the economy.

The sale is expected to complete this quarter, Sterling said.

Ventras Capital Advisors LLC has been formed to invest in CMBS, parent MBH Enterprises LLC reported in October. Ventras was in the process of raising third party capital.

Scott Roth and Patti Unti from Capmark Investments will lead Ventras. The company expects commercial and residential distressed opportunities to explode over the next couple of years.

Nomura Securities International Inc. has joined Tradeweb as a liquidity provider for its online dealer-to-client TBA-MBS marketplace, according to a Nov. 16 announcement. Nomura is the 12th dealer to join. Tradeweb said it launched its mortgage market in 2001.

“The to-be-announced mortgage-backed securities marketplace is Tradeweb’s largest, with average daily trading volumes of more than $70 billion in 2009, up 6 percent from 2008 year-to-date,” Tradeweb said.

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