CHICAGO–Alliant Credit Union is reporting its loan trading desk sold $470 million in commercial and consumer loan participations during 2022 through 25 transactions, up 74% from 2021.
On the purchase side, Alliant Credit Union said its loan trading desk bought $440 million in residential and consumer loan participations and purchases across eight transactions from credit unions, fintechs, and specialized lenders. The loan trading desk was active across multiple asset classes including first mortgages, unsecured term loans, automotive lease extensions, home equity lines of credit (HELOCs), solar loans, home improvement loans, and RV loans, Alliant CU said.
“This year was a tale of two markets, with 80% of our loans sold in the first half of the year,” said Gilberto Roman, senior manager, Loan Trading Desk. “We managed a record year, in the face of consistent rate hikes that decreased demand for fixed-rate loans in the second half of the year.”
A Shift in Markets
According to Alliant CU, in a move that mirrored the shift in markets, it sold a majority of fixed-rate consumer loans in the first half of the year and shifted to sell mainly floating-rate commercial loans in the second half of the year, yielding attractive returns in a volatile market.
Alliant CU said it expanded its network by transacting with 13 new counterparties, with trading partners encompassing fintech lenders in the digital realm, as well as credit unions throughout the United States.
Commercial Loan Sales
In addition, Alliant Credit Union said its commercial real estate mortgage loan sales spanned multifamily properties, including student housing and manufactured housing communities, often with complex structures.
In one such example, Alliant said it funded a $55.8 million loan to use towards the refinance of a 350-unit Class A multi-family property located within the Raleigh North Carolina MSA owned by a highly experienced and respected owner-operator of real estate assets throughout the east coast.
“The new construction asset was fully stabilized with top-of-the-line amenities,” Alliant CU said. “The loan was a variable-rate loan featuring an interest-only period, and flexible exit options.”
In a statement, one Alliant CU commercial loan originator said, “We were pleased to work with such a strong and experienced operator. The Raleigh MSA is poised to continue growing at a substantial pace into the future, which positions this newly built, high-quality asset for positive operating results.”
‘Important Lever’
Alliant CU said that with interest rates continuing to move up in 2023, loan trading is an important lever for credit unions to manage loan-to-share ratios.
“Now is a great time for credit unions or depositary institutions with liquidity to add high-quality loans to their balance sheets,” said Charles Krawitz, chief capital markets officer and head of commercial lending at Alliant. “We have attractive participations available such as floating rate HELOCs that can be benefitted from in this rising rate environment.”
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