KeyBank To Acquire Bank of America CMBS Servicing Portfolio And Berkadia CMBS Special Servicing Business KeyBank Real Estate Capital to become the third largest named servicer of commercial/multifamily loans in the U.S.
CLEVELAND, May 9, 2013 /PRNewswire/ -- KeyBank Real Estate Capital, the commercial real estate business unit of KeyCorp (NYSE: KEY), announced today that it has entered into a series of agreements that will substantially increase its commercial mortgage servicing business. Under the terms of an agreement with Bank of America, N.A., KeyBank has agreed to purchase certain commercial mortgage servicing rights from Bank of America.
As of March 31, 2013, Bank of America had a total commercial mortgage servicing portfolio of approximately $110.5 billion. The transaction also includes a CMBS special servicing portfolio of about $14 billion.
KeyBank will purchase substantially all of the third party CMBS and special servicing rights from Bank of America's Global Mortgages & Securitized Products business. This portfolio also includes servicing for a variety of private investors, subject to investor consent. We anticipate a seamless transition and closing of the transactions in the second quarter. This transaction does not impact Bank of America's Commercial Real Estate Banking business.
Upon completion of this transaction, KeyBank's commercial mortgage servicing portfolio will be among the top three largest named servicers of commercial/multifamily loans in the U.S., with a servicing portfolio of approximately $205 billion.
Simultaneously, KeyBank has entered into a long-term sub-servicing agreement with Berkadia Commercial Mortgage LLC. Under this agreement, Berkadia will act as sub-servicer on all CMBS primary servicing acquired from Bank of America. In connection with this agreement, KeyBank has also agreed to acquire Berkadia's CMBS special servicing business.
On a pro forma basis, after closing the agreements with Bank of America and Berkadia, Key will be named special servicer on approximately $47 billion of CMBS, making Key the fifth largest CMBS special servicer.
Completion of the agreements with Bank of America and Berkadia are subject to obtaining any required consents from certain investors, rating agencies and regulators.
"This acquisition helps to ensure that Key is well-positioned for growth, and represents our willingness to invest in our Corporate Bank business," said Chairman and CEO Beth E. Mooney.
"Acquiring these portfolios allows us to further leverage our highly-rated servicing platform," said Marty O'Connor, executive vice president and head of KeyBank Real Estate Capital Loan Servicing and Asset Management. "Our existing partnership with Berkadia will allow us to quickly integrate the Bank of America portfolios."
"We are excited at the opportunity to expand our relationship with KeyBank," said Mark McCool, executive vice president and head of servicing for Berkadia. "This agreement allows KeyBank to once again take advantage of our highly scalable and highly rated mortgage servicing platform."
KeyBank Real Estate Capital holds the highest commercial servicer ratings from Morningstar Credit Ratings LLC and S&P as a CMBS master, primary and special servicer.
KeyBanc Capital Markets acted as financial advisor to Key in the acquisition.
About KeyBank Real Estate Capital
KeyBank Real Estate Capital is one of the nation's leading commercial real estate finance providers. Its professionals, located in select markets coast-to-coast, provide construction and interim finance, permanent mortgage and commercial real estate loan servicing, as well as investment banking and cash management services for virtually all property types. As a Fannie Mae Delegated Underwriter and Servicer and Freddie Mac Program Plus Seller/Servicer, KeyBank Real Estate Capital offers a variety of agency financing solutions for multifamily properties, including seniors housing and student housing.
KeyCorp was organized more than 160 years ago and is headquartered in Cleveland, Ohio. One of the nation's largest bank-based financial services companies, Key had assets of approximately $89.2 billion at March 31, 2013.
Key provides deposit, lending, cash management and investment services to individuals and small and mid-sized businesses in 14 states under the name KeyBank National Association. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com. KeyBank is Member FDIC.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Key's commercial mortgage servicing portfolio and plans for future growth. Forward-looking statements can be identified by words such as "expect," "believe," and "anticipate," and other similar references to future periods. Forward-looking statements are not historical facts but instead represent management's current expectations and forecasts regarding future events, many of which, by their nature, are inherently uncertain and outside of Key's control. Key's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Factors that could cause Key's actual results to differ materially from those described in the forward-looking statements can be found in KeyCorp's Form 10-K for the year ended December 31, 2012, which has been filed with the Securities and Exchange Commission and is available on Key's website (www.key.com/ir) and on the Securities and Exchange Commission's website (www.sec.gov). Forward-looking statements are not guarantees of future performance and should not be relied upon as representing management's views as of any subsequent date. Key does not undertake any obligation to update the forward-looking statements to reflect the impact of circumstances or events that may arise after the date of the forward-looking statements.