To prepare for its pending merger with Bank of Boston Corp., a Boston thrift is selling its $150 million commercial real estate portfolio to a finance company.
Boston Bancorp, the thrift company, said it will receive 87% of the unpaid loan balance at the time of the closing from BlackRock Capital Finance LP. The commercial realty loans comprised about 35% of the $1.9 billion-asset thrift's total loans at Sept. 30.
Officials at Boston Bancorp, which owns South Boston Savings Bank, said they don't expect a material gain or loss from the sale, which was required by the thrift's October 1995 merger agreement with Bank of Boston.
The thrift's officials said the agreement would let them incorporate the sale price into the proxy statement for shareholders so they can see exactly what price they will get from Bank of Boston.
"It's helpful for the shareholders, when they consider the Bank of Boston merger, to have this issue resolved," said Greg Shaw, senior vice president of South Boston Savings Bank, the thrift company's subsidiary.
Funds for the purchase will come from BlackRock Financial Management Inc., a New York City investment management company affiliated with Pittsburgh-based PNC Bank Corp., which has more than $560 million of capital to buy real estate debt.
BlackRock also agreed to set up a commercial loan production and customer service office to serve customers in the Boston area. Until the sale closes, Boston Bancorp will work with BlackRock to extend the maturities of its commercial loans so that customers won't have loans called as the sale goes through.
The sale, which is contingent upon approval of the merger by Boston Bancorp shareholders in late March or early April, is expected to close this spring.
