Shares of PacWest Bancorp (NASDAQ: PACW) gained in pre-market trading at the time of writing on Monday after the regional bank, in a bid to boost its liquidity as concerns about deposit outflows abound, announced the sale of its asset-backed loan portfolio to Ares Management Corp. for $3.5 billion.
Ares’s Alternative Credit funds bought this loan portfolio that is backed by assets including consumer loans, mortgages, and timeshare receivables. PacWest stated in its filing that the first tranche of the deal closed last week. As a part of this deal, Ares acquired an outstanding principal balance of $2.1 billion and assumed “$187.14 million of the $1.33 billion unfunded commitment in the Portfolio.” The sale of the first tranche generated cash proceeds of $2 billion before transaction costs.
PACW stated in its SEC filing that this sale, “in addition to the approximately $2.36 billion of cash proceeds received from the previously closed sale of National Construction loans, will improve our liquidity and our capital ratios.”
Analysts are sidelined about PACW stock with a Hold consensus rating based on one Buy and six Holds.
