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Bank of America to buy WaFd's multi-family loan portfolio for $2.9 billion

A Bank of America building is seen in Los Angeles

(Reuters) -Washington Federal Bank agreed on Friday to sell a portfolio of commercial multi-family real estate loans to Bank of America for about $2.9 billion, helping the regional lender cut its exposure to the troubled sector.

The commercial real estate (CRE) sector, which has been roiled by higher borrowing costs and lower occupancy, has become a key cause of concern for investors and has drawn tough regulatory scrutiny for regional lenders.

Parent company WaFd, in a regulatory filing, disclosed the portfolio of 2,000 commercial multi-family real estate loans had an aggregate unpaid principal balance of $3.2 billion.

After the deal is closed, WaFd said BofA is planning to enter into a structured transaction or loan sale with one or more funds of Pacific Investment Management.

WaFd shares were marginally up in morning trading on Friday. The stock is down around 9% so far this year.

(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Eluri)