Lender Capmark Financial Group Files for Bankruptcy

Capmark Financial Group Inc., the lender owned by firms including Goldman Sachs Group Inc. and KKR & Co., filed for bankruptcy protection after posting a second- quarter loss of about $1.6 billion.
The company listed consolidated debt of $21 billion and consolidated assets of $20.1 billion as of June 30 in Chapter 11 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware.

Horsham, Pennsylvania-based Capmark is one of the largest U.S. commercial real estate finance companies, with more than $10 billion in originations, according to Moody’s Investors Service. The company services more than $360 billion of debt.

Capmark, formerly known as GMAC Commercial Holding Corp., said it struck a deal with Warren Buffett’s Berkshire Hathaway Inc. and Leucadia National Corp. to sell its loan servicing and mortgage business to the companies for as much as $490 million, according to a Sept. 2 statement.

The company had its senior unsecured ratings lowered to C from Caa1 by Moody’s Investors Service Inc. after the announcement of the potential sale, its release of the operating results and its restructuring efforts, according to a Sept. 9 credit opinion issued by Moody’s.

“Unsecured lenders and bondholders, either in a default or restructuring scenario, would experience substantial losses,” Moody’s said in the opinion. The C rating reflects the potential loss severity, according to the report.

KKR, the New York-based private-equity firm run by Henry Kravis and George Roberts, wrote their investment in Capmark down to zero as of March 31 of this year, according to data provided by its publicly traded investment vehicle.

- Via Bloomberg