(Bloomberg) -- A group led by KKR & Co. has purchased a roughly $7.2 billion portfolio of recreational vehicle loans from Canada’s Bank of Montreal, as private credit lenders continue to scoop up assets from financial institutions, according to a statement seen by Bloomberg.

BMO started exploring the sale of the super-prime portfolio earlier this year, Bloomberg reported in October, noting KKR was among the potential bidders. BMO provided seller financing to the purchasing parties, by buying $6.4 billion of bonds backed by the RV loans KKR purchased, the statement says. 

KKR bought the portfolio alongside Kennedy Lewis Investment Management and other investors. BMO will remain the servicer of the loans and will continue to originate RV debt, according to the statement. 

The trade comes as banks sell bundles of consumer debt on their books to improve liquidity following the crisis at regional lenders earlier this year, starting with Silicon Valley Bank’s collapse in March. That’s created an opportunity for private credit firms to snap up those portfolios and increase their footprint in asset-based finance, a corner of the credit markets that includes anything from consumer loans to mortgages.

“Banks are looking for ways to transform and optimize their balance sheets, including by selling loans. This trend allows firms like ours to step in and partner with banks in these type of sales,” said Dan Pietrzak, KKR’s global head of private credit, in an interview.

Read more: KKR Says Asset-Based Debt Among Top Private Credit Opportunities

KKR has been one of the private credit shops that’s made inroads in asset based finance this year, taking advantage of the bank pullback. The alternative asset manager — which has roughly $47 billion in asset based finance investments under management, according to the statement — acquired a portfolio of prime auto loans from Georgia-based Synovus Financial Corp. in August. In 2021, it bought a nearly $800 million portfolio of aviation loans from CIT Group Inc.

BMO, which is currently absorbing Bank of the West, an acquisition it completed in February, is not the only bank shedding assets.

Earlier this year, Ares Management Corp. purchased a $3.5 billion portfolio from California-based PacWest Bancorp, backed by consumer loans, mortgages and timeshare receivables. Truist Financial Corp. unloaded a $5 billion student loan portfolio that it described as “non-core” in late June, while Western Alliance Bancorp sold roughly $3.5 billion in loans tied to commercial real estate, residential and commercial and industrial lending, as well as mortgage servicing rights and a slug of securities that were primarily collateralized loan obligations. 

“We are seeing regional banks increasingly moving away from providing the same level of capital to many specialty finance firms. The private credit market is able to step in and fill that void,” Pietrzak said.

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