The Federal Deposit Insurance Corporation (FDIC) has closed on a sale of 40% equity interest in a company created to hold approximately $1.7bn of primarily non-performing commercial acquisition, development and construction (CADC) loan assets out of AmTrust Bank.

The winner of the structured transaction is a three-party consortium made up of PMO Loan Acquisition Venture, controlled by Oaktree Capital Management, Toll Brothers and Milestone Asset Opportunity.

As an equity participant, the FDIC, as receiver for AmTrust Bank, will retain a 60% stake in the company and share in the returns on the assets.

The sale was conducted on a competitive basis on either a 40% leveraged ownership interest or a 20% unleveraged ownership interest in the newly-formed company.

The FDIC has funded a development funding account that will supplement contributions by the consortium to finance certain permitted development activities related to the assets.

AmTrust bank failed on 4 December 2009, and the FDIC immediately entered into a purchase and assumption agreement with New York Community Bank, Westbury, New York, to assume all the deposits and approximately $9bn of the assets. The transaction completes the sale of the majority of the remaining assets of AmTrust Bank.