MountainView Capital Group, Denver, late Wednesday brokered a sale of 2,500 performing second liens with an unpaid principal balance of $110 million.
The Denver-based firm declined to name the buyer, seller, or sale price. The seconds were closed-end loans.
MountainView managing director Jonas Roth said the trade "reflects increasing demand for performing second-lien loans," adding that, "Market participants seek quality, in the form of continuing performance, to achieve their return targets. Current real estate values are reviewed but are of secondary importance in relation to the borrowers’ credit profile and ability to remain current on their payments."
Over the past two years many commercial banks have been quietly unloading their nonperforming second liens for just pennies on the dollar. (Some investors buy the loans hoping to make a $5,000 lien release fee on the notes.)
However, the MountainView sale involved performing product. "We continue to see robust activity in this sector as sellers recognize true value in the disposition of these assets," said Roth. MountainView is based in Denver.
