* Commercial loans being sold both current and delinquent
* Portfolio sold to venture backed by group of investors
* Sold at 20-25 pct discount from face value
By Ilaina Jonas and Joe Rauch
Sept 22 (Reuters) - Bank of America Corp (BAC.N) has reached an agreement to sell a commercial real estate loan portfolio worth nearly $1 billion to a group of investors, a source familiar with the matter said.
The bank will sell $880 million in loans at a discount of 20 percent to 25 percent from face value, the source said.
The discount applies across the board, even to performing loans, an indication of the bank's desire to unload some of its $44 billion commercial real estate portfolio.
The largest U.S. bank by assets is selling the loans to a venture created by Square Mile Capital Management LLC, Invesco Ltd (IVZ.N) and a fund managed by Canyon Capital Realty Advisors LLC.
Square Mile, which has a track record of buying loans from distressed lenders and from the Federal Deposit Insurance Corp, did not return a call seeking comment.
The portfolio includes current and delinquent loans tied to 32 properties of various types, including office properties and even senior housing in 15 states. However, most are warehouses, a specialty of Canyon Capital Realty Advisors.
A Bank of America spokesman declined to comment, as did Canyon Capital Realty Advisors, a unit of Los Angeles-based Canyon Capital Advisors LLC. An Invesco spokesman was not immediately available for comment.
Invesco, a unit of Invesco Ltd, recently put up the money to recapitalize 230 Park Avenue in New York, once the headquarters for the New York Central Railroad Co.
Bank of America has been shedding assets to boost its capital levels in advance of tightened banking industry capital rules and to absorb mortgage losses.
The bank's stock price has been cut in half since the start of the year on worries that it will need to raise as much as $50 billion in capital to weather home loan losses.
Chief Executive Brian Moynihan has said the bank can meet the new rules and absorb losses through asset sales and earnings.
In August, Bank of America sold half its stake in China Construction Bank for $8.3 billion to a group of investors, and sold its $8.6 billion Canadian credit card business to Toronto-Dominion Bank (TD.TO).
Last week, the bank sold a $1.5 billion stake in healthcare company HCA Holdings Inc (HCA.N).
The bank also sold the servicing rights on a pool residential mortgages to Fannie Mae (FNMA.OB) in August for $500 million.
Other banks also have been selling off their commercial loan properties. The largest sale so far is Anglo Irish Bank Corp's [ANGIB.UL] $9.5 billion portfolio of U.S. commercial real estate loans last month.
(Reporting by Joe Rauch in Charlotte, North Carolina and Ilaina Jonas in New York; Editing by Ted Kerr)