WASHINGTON, DC-Colony Capital Acquisitions, with junior equity partner Cogsville Group, was the winning bidder in the Federal Deposit Insurance Corp.’s latest structured sale. The JV closed on a sale of 40% equity interest in a limited liability company holding assets of approximately $1.85 billion from 22 failed bank receiverships. 

As an equity participant, the FDIC retains a 60% stake in the LLC and share in the returns on the assets. The FDIC offered 1:1 leverage financing and has agreed to guarantee purchase money notes issued by the LLC in the original principal amount of $563 million. Four bidders put out six bids for this transaction, on either a 40% leveraged ownership interest or a 20% unleveraged ownership interest in the newly formed LLC.

Seventy-three percent of the collateral in the portfolio is located in Nevada, California, Colorado, Arizona and Georgia. As the LLC's managing equity owner, Colony will manage, service and ultimately dispose of the LLC's assets. All of the loans were from banks that failed during the past 23 months. 

This deal is the first in which a minority-owned firm—Cogsville--is taking a stake in these public-private structured sale partnerships, according to the Wall Street Journal.

The FDIC began an outreach program this year to better market these sales to minority-owned firms. The Journal reports that the agency is also tailoring some of its asset sales to target this constituency--specifically creating a portfolio of $181 million of commercial property debt for it. The FDIC did not return a call to GlobeSt.com in time for publication. 

Such tinkering has been par the course for the FDIC. While routine, the agency has been working on the program on a transaction-by-transaction basis, Thomas Galli, a shareholder at Greenberg Traurig LLP told GlobeSt.com in an earlier interview.