September 21, 2011
DebtWire ABS - by John Wilen
Whole loan brokerage First Financial Network is departing from the industry standard "all-or-nothing" approach with two loan pools currently out for the bid, said Merrie Duncan, the Oklahoma City firm's marketing director.
FFN will allow buyers to bid on portions of the two pools, a USD 3.7m portfolio of FDIC loans and a USD 100m pool of loans from a bank located in the plains states, according to Duncan and First Financial's website. The pools could be sold in as many as 18 separate pieces, Duncan said.
For instance, FFN would accept bids on the FDIC pool by asset class, she said. That pool consists of performing and non-performing commercial real estate loans, commercial and industrial loans and auto loans, she said. Bids are due by 27 September. The USD 100m bank loan pool, which includes both performing and non-performing credits, could be split as many as 15 different ways, depending on collateral type, location and performance, she said. That pool consists of commercial real estate and commercial and industrial loans. Bids are due on 12 October.
Most bank and government agency loan auctions are all-or-nothing affairs; five recent or pending sales — including pools sold by First Tennessee Bank, JPMorgan, Wells Fargo, the Federal Reserve and the FDIC — have all been offered as single portfolios to the highest bidder, as previously reported. But Duncan said FFN often "stratifies" its portfolios to enable more investors to participate. In some cases, the company even lets buyers bid on a single loan, she said. "There are distinctions between those investors seeking to acquire non-performing loans vs. performing loans," Duncan said. "Occasionally, there is cross-over, particularly with some of the larger investor groups, but generally these are different sandboxes."