Yesterday, the FDIC reported that it signed a bid confirmation letter to sell a 40 % equity interest in a LLC created to hold the assets of the failed Illinois Bank, Corus Bank, NA, headquartered in Chicago. This sale marks the second time that the FDIC has used the Legacy Loan Program to take troubled assets out of an FDIC receivership. The first such sale occurred with respect to assets of Franklin Bank. As receiver of Corus Bank, the FDIC received 8 bids to purchase the ownership of the LLC. The winning bidder, Northwest Investments, LLC, is a consortium managed by Starwood Capital Group that also includes TPG Capital Group, Perry Capital and WLF LeFrak. Northwestern Investments, LLC, will assume $4.5 billion in troubled non-performing construction loans and real estate owned assets of Corus Bank. The transaction report showed that Northwest Investments, LLC will pay $554 million in cash for its equity stake, and will borrow $1.36 billion from the FDIC to finance the remaining $2.77 billion bid. The FDIC will initially hold a 60% equity interest in the LLC.
The FDIC expects to close this deal in mid-October, consistent with previously reported timelines.