Allied Sells Commercial MBS Portfolio

Allied Capital has sold its commercial mortgage-backed securities portfolio and collateralized debt obligation assets to Caisse de depot et placement du Quebec for cash proceeds of about $976 million.

And Allied Capital has also entered into a letter of intent with Caisse for the sale of some of Allied Capital's other commercial real estate assets, including servicer advances, intellectual property, software and other "platform assets".

This could happen by the end of the second quarter, Allied Capital said.

Bill Walton, chairman and CEO, Allied Capital, said, "With this sale we are monetizing the value of our sizable CMBS and CDO portfolio for shareholders. Investing in CMBS has become more competitive and the markets have recognized the ability to leverage this asset class in excess of what a BDC structure can accommodate."

Allied Capital has therefore gone through with the sale to realize the value in this portfolio, he added.

He also sees this as the right time in the real estate cycle to sell these assets.

The company expects a net gain from the sale to be about $229 million.

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