(Bloomberg) -- PacWest Bancorp sold a $3.5 billion asset-backed loan portfolio to Ares Management Corp. as it continues to offload assets to boost its liquidity amid concerns about deposit outflows.
Ares’s Alternative Credit funds bought the specialty finance portfolio backed by assets including consumer loans, mortgages and timeshare receivables, the fund manager said in a statement Monday. PacWest said in a filing that the first tranche of the deal closed last week and brought $2 billion of cash proceeds before transaction costs.
PacWest is taking steps to bolster its finances after runs on deposits struck several regional lenders earlier this year, leading to the collapse of three California-based banks and one in New York. Earlier this month, it completed the first part of the sale of a separate $5.7 billion loan portfolio to real estate investment company Kennedy Wilson Holdings Inc.
PacWest shares rose as much as 10% in premarket trading. Its stock slumped 69% this year through Friday amid the turmoil.
The portfolio purchased by Ares has an aggregate commitment amount of $3.54 billion, including an outstanding principal balance of $2.21 billion, PacWest said in the filing.
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