Investors to Buy Up to $2 Billion of Troubled B of A Assets

An investors’ group plans to buy as much as $2 billion in bad real estate loans and properties from BankAmerica Corp., a newspaper reported Monday.

Morgan Stanley Realty Fund, a partnership of institutional investors, plans to acquire “the vast majority, if not all” of the troubled assets, the Wall Street Journal reported.

The sale could give BankAmerica about $1 billion, based on discounts in recent deals for similar groups of loans, the newspaper said. The reported sale comes after several quarters in which the corporation has downgraded the value of its distressed real estate by about 50%.

Much of the BankAmerica portfolio includes California commercial real estate, which has sharply declined in value in recent years.

Bank stock analyst Thomas Hanley said the reported sale was “a very positive development in terms of (BankAmerica’s) credit quality.”

BankAmerica’s stock rose $2.125 to close at $9.50 on the New York Stock Exchange.

It was unclear whether BankAmerica or Morgan Stanley will manage the assets after the sale. Officials at both companies declined comment.