PacWest Bancorp has agreed to sell $2.6 billion worth of real estate construction loans at a discount to Kennedy-Wilson Holdings in order to improve its balance sheet. Kennedy-Wilson will also assume about $2.7 billion in funding obligations associated with the loans.

The 74 real estate construction loans were sold for $2.4 billion. That’s “a $200 million discount, a regulatory filing showed on Monday,” reports NBC news.

The loans carry floating interest rates that average 8.4%, “substantially” higher than PacWest’s fixed-rate loan portfolio. The sale was made at a small discount reflecting a decline in the value of the underlying real estate assets.

The sale has led to a nearly 20% increase in PacWest’s stock, which has more than doubled from its record low in May. PacWest has lost three quarters of its market value since March 8.

The sale is expected to close in multiple tranches during Q2 and early Q3.

PacWest is also exploring a sale of its $2.7 billion lender finance loan portfolio, which it expects to have completed by next month.

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