KeyCorp To Buy Mortgage Servicing Rights From BofA

KeyCorp (KEY) agreed to purchase certain commercial mortgage servicing rights from Bank of America Corp. (BAC), a deal that will make KeyCorp's commercial mortgage servicing portfolio among the top three largest servicer of commercial and multifamily loans in the U.S.

The deal, expected to close in the second quarter, will put KeyCorp's servicing portfolio at about $205 billion and includes substantially all of the third-party CMBS and special servicing rights from Bank of America's Global Mortgages & Securitized Products business.

Bank of America had a total commercial mortgage servicing portfolio of about $110.5 billion as of March 31. The deal also includes a CMBS special servicing portfolio of about $14 billion, KeyCorp said.

KeyCorp also entered into a long-term sub-servicing agreement with Berkadia Commercial Mortgage LLC, which will act as a sub-servicer on all CMBS primary servicing acquired from Bank of America. KeyCorp agreed to acquire Berkadia's CMBS special servicing business as part of the deal.

After closing the agreements with Bank of America and Berkadia, KeyCorp will be named special servicer on roughly $47 billion of CMBS, making it the fifth-largest CMBS special servicer.

"Acquiring these portfolios allows us to further leverage our highly-rated servicing platform," said Mary O'Connor, head of KeyBank real estate capital loan servicing and asset management.

Completion of the deals is subject to consents from certain investors, rating agencies and regulators.

KeyCorp shares, inactive premarket, closed Thursday at $10.29. The stock is up 30% in the past 12 months.

Write to Anna Prior at [e-mail]

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