BankUnited in Miami Lakes, Fla., has sold two batches of securities in order to comply with the Volcker Rule.
The $14.3 billion-asset company sold its entire portfolio of collateralized loan obligations, with a cost-basis of $431 million, at a loss of $1.4 million on Tuesday. It also sold $119 million of private-label re-securitized real estate mortgage investment conduits, or Re-REMICS, for a $3.8 million gain.
The sales were prompted by the release last week of the final version of the Volcker Rule, BankUnited said. The rule bans large commercial banks from certain types of risky trading.
BankUnited "continues to evaluate its remaining investment holdings in light of the Volcker Rule," it said in a news release.
Banks have been boosting their holdings of CLOs this year as a means to pick up yield while minimizing interest-rate risk. Banks held $69.8 billion in CLOs as of the end of the third quarter, up 54% from a year earlier, according to a report released Thursday by SNL Financial.
But the Volcker Rule could slow or reverse this trend by forcing banks - including dozens of small and regional banks to
Zions Bancorp in Salt Lake City said it would