first-ever loan sale a great success.
On Wednesday, the SBA announced that it had received bids from 25 companies on 4,060 loans it originated or guaranteed. About half the loans, which had $332 million of unpaid principal, were nonperforming or underperforming.
One bidder -- CFSC Consortium LLC of Minneapolis -- walked away with nearly 97% of the assets. Loan Participant Partners Ltd., an affiliate of $1.4 billion-asset Beal Bank, both in Dallas, bought the remaining loans. The two bids totaled $195 million, $90 million more than the SBA had estimated it would receive if it held the loans to maturity.
"SBA is pleased with the large number of bids that it received and with the prices offered for the loans," said deputy administrator Fred P. Hochberg.
The auction was the first in a series of asset sales the agency plans to hold in the next three years. The second sale is scheduled for mid-2000. In all, the agency plans to sell $10 billion of loans.
The Treasury Department is to get the $195 million the SBA gained on the sale, minus $7 million for expenses and contractor fees.
The asset sales are designed to help the agency become more efficient, which is expected to let it to do more with each appropriated dollar. -- Scott Barancik