Opportunity:
Sovereign Bank underwent an acquisition of deposits, loans and other businesses from Fleet/BankBoston. The divestiture of the branches of Fleet/BankBoston was mandated by the U.S. Department of Justice (the "DOJ") in connection with a Fleet/BankBoston merger. While the assets and liabilities Sovereign Bank acquired were selected by the DOJ to help ensure a competitive banking environment in New England, Sovereign's acquisition of these businesses was an important step in accelerating and substantially completing its transformation from a traditional mortgage lender to a commercial bank.

Cardinal Solution:
Cardinal Capital Partners invested in a $330 million portfolio totaling 127 bank branches and office buildings consisting of 104 properties from Fleet Boston Corporation ("Fleet/Bank Boston") and a number of affiliated banking institutions and 23 properties from Sovereign Bank. All of these were simultaneously leased to Sovereign Bank.

The heavily regulated environment in which banks operate imposed a stringent timeline on the transaction, which was strictly adhered to.

By far, the portfolio contained the largest number of properties in a single transaction of this type. This presented significant real estate due-diligence challenges, which our team of professionals quickly embraced.

The 144A public-style bond offering presented many new structural elements and issues that had to be rendered acceptable to the rating agencies and bond investors in the midst of a very volatile capital markets environment.

As a result of the massive deployment of resources by both Sovereign Bank and Cardinal Capital Partners, the transaction was successfully completed within the allotted 60-day time frame.