Hancock Whitney Corporation (Nasdaq: HWC) today announced it has agreed to sell $497 million of energy loans to certain funds and accounts managed by Oaktree Capital Management, L.P. The sale includes reserve-based (RBL),midstream and nondrilling service credits. The company expects to receive proceeds of $257.5 million from the sale of these loans upon satisfaction of certain closing conditions. All loans included in the transaction were re-classified as held for sale as of June 30, 2020, and any write-downs and charge-offs associated with the sale are reflected in the company’s second quarter’s results.
A special provision for credit losses related to the transaction of approximately $160.1 million (pre-tax),or $1.47 per diluted share (21% tax rate),will be included in the company’s second quarter 2020 earnings results.
John M. Hairston, President and CEO said the following:
“The primary objective of this sale is to continue de-risking our loan portfolio by accelerating the disposition of assets that have been impacted by ongoing issues within the energy industry, and have now been further complicated by COVID-19”
The company will report second quarter 2020 financial results on July 21, 2020 at 3:05pm Central Time and host a conference call to discuss both financial results and the loan sale transaction at 4:00pm Central Time the same day.
The stock has been down 57% YTD.
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