banks

The New York-based banking giant has been working to actively reduce its balance-sheet exposure to the sector since the start of the year.

The concern is that when rate cuts finally happen, the magnitude of these cuts could be lower than expected. 

Specialist lenders are gearing up for distress in various ways, such as creating short-term structured credit platforms to originate mezzanine debt or preferred equity.

Legislative changes planned by the US Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation would affect banks with more than $100bn in assets.

The transaction market remains stymied by a wide gap between buyers and sellers.

Negative headlines in the mainstream press may center on other pressure points, but market participants are focused on the possibility of further rate increases.

Leverage helped to fuel acquisitions, refinancings and returns over the past cycle. Now, lenders and borrowers are working to adapt to a new reality.

Transaction volumes will stay subdued until bank lending standards begin to ease.

Bank sale mirrors similar moves by Capital One and Pacific Western Bank to add liquidity amid market stress.

Lack of money center banks is creating more space for private credit lenders with multifamily, industrial and construction lending.