SAN FRANCISCO -- BankAmerica Corp. said Wednesday that, as expected, it had completed the sale of distressed real estate loans and assets acquired in its merger last year with Security Pacific Corp.

Kearny Street Real Estate Co., a collecting entity owned by Morgan Stanley Real Estate Fund, purchased distressed assets with balances totaling $1.6 billion as of July 1.

BankAmerica said it received approximately $700 million, or 43% of the book value, and will get $300 million in tax benefits.

Making up the purchase price was $200 million in collections on assets pending disposition and $500 million from the proceeds of Kearny Street debt and equity financings.

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