77.7 F
Charlotte Amalie
Thursday, March 28, 2024
HomeNewsArchivesBEAL BANK INTO VIRGIN ISLANDERS FOR $82 MILLION

BEAL BANK INTO VIRGIN ISLANDERS FOR $82 MILLION

Texas banker and former space entrepreneur Andrew Beal purchased $82 million worth of loans originating from the Virgin Islands in August. And that has Delegate to Congress Donna Christian Christensen worried.
Beal Bank’s bid purchase of more than $1 billion in Small Business Administration disaster loans, $82 million of which are from the territory, has Christensen calling on SBA Administrator Aida Alvarez to conduct a complete review of the sale of SBA loans from the Virgin Islands to commercial institutions, especially those sold to Beal Bank.
Christensen said that her office had recently received a flurry of complaints regarding loans sold to Beal Bank, specifically that "the bank was unwilling to honor previous arrangements that lenders made with SBA and that there was little or no consideration given to the fact that lenders made loans under the duress of natural disaster and the hardship of a failing economy."
Also spurring concern, Christensen said, is the possibility of a connection between Beal Bank's decision to purchase the Virgin Islands portfolio and the recent community opposition to Beal Aerospace’s proposed $57-million world headquarters and rocket assembly plant on St. Croix.
"Even though the purchase was competitively bid, I know that my constituents will believe, with good reason, that the purchase may have been made to in some way retaliate for the community's opposition to the purchase of the property in question," Christensen wrote to Alvarez.
Beal Bank officials could not be reached for comment on Tuesday, nor could representatives at the SBA’s Niagra Falls, New York office, under which the Virgin Islands falls.
According to a Beal Bank filing with the Securities Exchange Commission, the bank entered into a contract with the SBA in August to purchase 26,167 performing, sub-performing, and non-performing loans at a discounted price of $1.2 billion. The loans were originated or guaranteed by the SBA under its disaster loan programs or business loan programs. Approximately $986 million of the loans are located in the U.S., $112 million in Guam, $82 million in the Virgin Islands and $12 million are in the Pacific Islands.
Christensen said that in a conversation and a letter to Alvarez this week, she asked for "close scrutiny" of the loans connected to the territory, especially to determine if the commercial institutions were in fact honoring the terms that Virgin Islanders agreed to with SBA when they originally took out their loans.
"I would further ask that a moratorium be placed on any further loan sales until such time that this review is completed," Christensen said.
According to the SEC, Beal Financial Corporation, Beal Bank’s parent company, had total assets of $1.5 billion at June 30, 2000, an increase of $106.3 million, from $1.4 billion at December 31, 1999.
Beal Bank has amassed its assets primarily through the purchase of discounted loans from various U.S. government agencies through the sealed bid process or auctions and from other private sellers. Beal Bank then establishes new terms with the borrower that often lead to a profit.
During the three and six month periods ended June 30, 2000, the bank purchased $72.8 million and $99.6 million of net loans, respectively, as compared to purchases of $24.9 million and $148.1 million of net loans for the same periods ended last year, according to the SEC filing.
Beal Aerospace, also headed by Andrew Beal, announced on Monday that it was scrapping its three-year-old effort to build satellite-carrying rockets. Beal blamed the U.S. government and its subsidy of competing NASA programs for the downfall of his rocket project.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.