Bank of America to acquire Washington Federal Bank’s $3.2 billion loan portfolio

The Bank of America Corporation (BofA) is set to purchase Washington Federal Bank’s portfolio of commercial multi-family real estate loans, valued at $3.2 billion.

The announcement was made by Washington Federal, Inc. (WaFd), the parent company of Washington Federal Bank, in a regulatory filing on Friday.

BoFA’s deal with Washington Federal Bank

According to the filing, BofA has agreed “to purchase approximately 2,000 commercial multi-family real estate loans with a current aggregate unpaid principal balance of $3.2 billion.”

This significant acquisition marks a strategic move by BofA to expand its portfolio in the commercial real estate sector.

Post-transaction plans

Following the closure of this transaction, BofA plans to “enter into a structured transaction or loan sale with one or more funds managed or advised by Pacific Investment Management Company LLC (PIMCO),” WaFd mentioned in the filing.

This indicates that BofA may not hold all the acquired loans but will collaborate with PIMCO to manage or sell portions of the portfolio.

Strategic implications

This acquisition highlights BofA’s commitment to strengthening its position in the commercial real estate market.

By acquiring a substantial portfolio of multi-family real estate loans, BofA can diversify its assets and enhance its revenue streams.

Additionally, partnering with PIMCO, a renowned investment management firm, could provide strategic benefits in managing and optimizing the loan portfolio.

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