KeyCorp (KEY) agreed to purchase certain commercial mortgage
servicing rights from Bank of America Corp. (BAC), a deal that will
make KeyCorp's commercial mortgage servicing portfolio among the
top three largest servicer of commercial and multifamily loans in
the U.S.
The deal, expected to close in the second quarter, will put
KeyCorp's servicing portfolio at about $205 billion and includes
substantially all of the third-party CMBS and special servicing
rights from Bank of America's Global Mortgages & Securitized
Products business.
Bank of America had a total commercial mortgage servicing
portfolio of about $110.5 billion as of March 31. The deal also
includes a CMBS special servicing portfolio of about $14 billion,
KeyCorp said.
KeyCorp also entered into a long-term sub-servicing agreement
with Berkadia Commercial Mortgage LLC, which will act as a
sub-servicer on all CMBS primary servicing acquired from Bank of
America. KeyCorp agreed to acquire Berkadia's CMBS special
servicing business as part of the deal.
After closing the agreements with Bank of America and Berkadia,
KeyCorp will be named special servicer on roughly $47 billion of
CMBS, making it the fifth-largest CMBS special servicer.
"Acquiring these portfolios allows us to further leverage our
highly-rated servicing platform," said Mary O'Connor, head of
KeyBank real estate capital loan servicing and asset
management.
Completion of the deals is subject to consents from certain
investors, rating agencies and regulators.
KeyCorp shares, inactive premarket, closed Thursday at $10.29.
The stock is up 30% in the past 12 months.
Write to Anna Prior at anna.prior@dowjones.com
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