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PHOENIX HOME LIFE CLOSES MAJOR COMMERCIAL REAL ESTATE TRANSACTIONS VALUED AT $500 MILLION; TAKES ADVANTAGE OF FAVORABLE MARKETS

 HARTFORD, Conn., Dec. 13 /PRNewswire/ -- Phoenix Home Life Mutual Insurance Company today announced the successful closing of two major commercial mortgage loan transactions totaling approximately $500 million.
 The transactions are expected to reduce the company's overall commercial mortgage loan portfolio to $1.3 billion, or 14.5 percent of invested assets by year-end.
 The two separate and unrelated transactions involved the securitization of a $410 million portfolio of performing commercial mortgage loans; and the sale of $95.8 million of loans in default or foreclosure with no ongoing exposure on the part of Phoenix Home Life.
 "Recognizing the extremely favorable climate for commercial mortgage-backed securities, Phoenix Home Life set about months ago to reduce our overall real estate exposure," said John Gummere, Chairman and Chief Executive Officer of Phoenix Home Life.
 "The performing loan securitization, coupled with the nonperforming loan sale, will bring our mortgage loan to assets and problem mortgage loan ratios more in line with our preferred portfolio allocation as well as industry norms," he continued. "They will also improve our asset structure and truly strengthen the company as it positions itself to grow in the future."
 Performing Loans Securitized
 The $410 million securitization involved 102 individual performing commercial loans diversified both geographically and by property type.
 "Commercial mortgage-backed securitizations result in a far better pricing net of expenses than direct whole loan sales," said Scott C. Noble, Senior Vice President, Real Estate.
 Noble noted that Phoenix Home Life sold subordinate groupings which in the aggregate represent approximately 25 percent of the securities created while retaining the balance of the investment-grade securities. As a result, while the program substantially reduces the company's real estate exposure, projected net income from the corporate investment portfolio will be virtually unaffected. Goldman, Sachs & Co. advised Phoenix Home Life in connection with the securitization.
 Nonperforming Loans Sale Approaches 70 Percent of Book Value
 The second transaction involved Phoenix Home Life's first-ever sale of 24 subperforming and nonperforming commercial mortgage loans through a private offering managed by First Boston Corporation. The 24 loans, mostly secured by office and retail properties, represent Phoenix Home Life's weakest problem loans.
 "We have taken advantage of a window of opportunity in the problem real estate loan market because of the current hiatus in Resolution Trust Corporation dispositions. As a result, Phoenix Home Life will receive net after-tax proceeds approaching 70 percent of the book value outstanding for the loans sold," Noble said.
 This sale also will immediately reduce Phoenix Home Life's problem loan ratio and eliminate a significant portion of its anticipated foreclosures in future years.
 "While these transactions should be viewed as a concerted effort by Phoenix Home Life to manage its assets wisely and to aggressively reduce our real estate exposure, we want to emphasize that our company will continue to be committed to real estate investment management both as an investor and a money manager," Gummere said.
 Phoenix Home Life is among the largest mutual life insurance companies in the country. Through its offices and sales representatives throughout the country, Phoenix Home Life offers a diverse portfolio of business and personal life insurance products, employee benefits, institutional investment management and individual investment products.
 -0- 12/13/93
 /CONTACT: Tom Garicpy, 203-275-5946 or home, 203-659-9566 or Jo-Anne Leventhal, 203-275-5359, both of Home Life/


CO: Phoenix Home Life ST: Connecticut IN: INS SU: TNM

LG-WB -- NY077 -- 3264 12/13/93 15:09 EST
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Publication:PR Newswire
Date:Dec 13, 1993
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