PacWest Dumps $2.6B Construction Loans

PacWest Bancorp has announced its agreement to sell a portfolio of 74 real estate construction loans worth approximately $2.6 billion to a unit of Kennedy-Wilson Holdings. The regional lender will also sell six more real estate construction loans with a total principal balance of around $363 million to Kennedy-Wilson. The sale of these loans aims to address the bank's declining deposits and improve its liquidity. This move comes as PacWest and other regional lenders face investor concerns about the overall health of the banking sector following the collapse of several banks since March, including San Francisco-based First Republic Bank. The transaction is expected to close in multiple tranches during the second and early third quarters of 2023. Shares rose 3.3% in premarket trading on Monday following the announcement.