Santander Bank, N.A. (NYSE: SAN)announced that it has closed a transaction with the Federal Deposit Insurance Corporation (FDIC) to participate in a joint venture that consists of a $9 billion portfolio of New York based multifamily real estate assets retained by the FDIC following the failure of Signature Bank.
The Bank acquired a 20 percent equity stake of the joint venture “for $1.1 billion at an attractive basis and will service 100 percent of the assets in the portfolio.”
Ana Botín, Banco Santander executive chair, said:
“This transaction underscores our strength and scale, leveraging our considerable expertise in the sector. We are a major participant in the U.S. multifamily space and this transaction plays to our strengths.”
The Bank has a $13.5 billion multifamily real estate portfolio, is a multifamily bank real estate lender in the United States and “holds an Outstanding Community Reinvestment Act (“CRA”) rating.”
Tim Wennes, Santander US country head and Santander Bank president and CEO, said:
“Santander US is a top-ten multifamily bank real estate servicer and lender and this transaction will leverage that industry expertise while also deepening our franchise in the New York metro market.”
The U.S. remains a strategic market for Banco Santander, “as demonstrated by this transaction.”
The portfolio of loans in the joint venture “consists of three pools of rent-controlled and rent-stabilized multifamily loans.”
The transaction will be accretive “starting in 2024 and consume approximately two basis points of Santander Group CET1, to be paid back within three years.”
Santander was advised in this transaction by Wachtell, Lipton, Rosen & Katz, Davis Polk, and Chain Bridge Partners.
As covered, Santander Holdings USA, Inc. (SHUSA) is “a wholly owned subsidiary of Madrid-based Banco Santander, S.A., a global banking group with 166 million customers in the U.S., Europe and Latin America.”
As the intermediate holding company for Santander’s U.S. businesses, SHUSA is the parent company of financial companies “with approximately 13,700 employees, 4.5 million customers, and $168 billion in assets, as of December 2022.”