Blackstone Top Bidder for Signature’s Commercial Property Loans

Private equity group Blackstone is reportedly the leading bidder for Signature Bank’s commercial property loans.

Sources tell Bloomberg News that Blackstone is the frontrunner to gain possession of an approximately $17 billion loan portfolio from the failed bank, per a report Sunday (Nov. 19).

The Federal Deposit Insurance Corp. (FDIC) has been trying to sell that debt since taking over Signature in March. The report noted that the banking regulator is now in final discussions to declare Blackstone’s bid as the one that will bring it the lowest costs.

Blackstone is in discussions with Rialto Capital, which would help service the loans, some of the sources told Bloomberg.

The report noted that commercial property owners have been pressured this year by rising borrowing costs, which have driven down property values. Investors, Bloomberg said, are interested in the Signature sale to gauge a better idea of pricing.

Signature’s collapse in March came two days after the high-profile downfall of Silicon Valley Bank (SVB), and days after another bank, Silvergate, revealed it was self-liquidating.

The FDIC took over closed SVB and seized its deposits in the second largest bank failure in American history, and the biggest since the 2008 financial crisis, after the bank suffered a run on deposits after reports that it was struggling.

Silvergate, meanwhile, announced March 8 it could no longer remain in business, hours after reports that it had said in a regulatory filing it doubted its future as a “going concern.”

Signature was sold to a subsidiary of New York Community Bancorp, though that bank did not purchase all of Signature’s loans.

Meanwhile, the FDIC said last week that America’s biggest banks would pay the bulk of the cost of replenishing the government deposit insurance fund following the banking crisis, after it was used to help uninsured depositors.

The FDIC has said its plan would require banks with $50 billion or more in assets to pay 95% of the fees, while banks with assets under $5 billion would be exempt. The government has said it aims to bring in $15.8 billion in extra fees over the course of two years.

Four of the biggest banks would pay most of the costs: J.P. Morgan Chase ($3 billion), Bank of America ($1.9 billion), Wells Fargo ($1.8 billion) and Citigroup ($1.5 billion).