Ares Commercial Real Estate Corporation Closes $667 Million CRE CLO
January 29 2021 - 6:30AM
Business Wire
Achieves Initial Blended Cost of Financing of
LIBOR + 1.17% with Initial Advance Rate of 81%
Significantly Increases Match-Term,
Non-Recourse Financing and Reduces Funding Costs
Ares Commercial Real Estate Corporation (NYSE: ACRE) (the
“Company” or “ACRE”) announced today that the Company, through
wholly owned indirect subsidiaries, closed an approximately $667
million commercial real estate collateralized loan obligation (“CRE
CLO”). The CRE CLO financed interests in 23 senior loans with an
initial advance rate of 81% and an initial weighted average coupon
of one-month LIBOR + 1.17%, excluding transaction costs. The CRE
CLO is match-term, non-recourse and non-mark to market financing to
the Company.
The CRE CLO transaction provided the following benefits to the
Company:
- Reduced weighted average cost of funds
- Increased non-recourse financing from 36% as of September 30,
2020 to 67% of total aggregate amounts outstanding under its
financing facilities and securitizations
- Enabled ACRE to close $146 million of new loans previously held
in Ares’ real estate debt warehouse facility
These benefits are expected to be accretive to the Company’s
earnings.
“We are very pleased with the execution of our fourth
securitization in the current market environment, which we believe
validates the strong credit quality of our loan portfolio and the
value of the broader Ares Management franchise,” said Bryan
Donohoe, Chief Executive Officer of ACRE. “The securitization
allowed us to optimize the financing of our existing assets by
repaying outstanding amounts under our secured funding facilities
and enabled ACRE to close $146 million in seven new loans.”
“This is a financially positive transaction for our Company that
enhances our earnings,” said Tae-Sik Yoon, Chief Financial Officer
of ACRE. “Our ability to close $146 million of new loans
concurrently with the closing of the CRE CLO is another example of
how Ares’ real estate debt warehouse facility brings substantial
benefits to ACRE.”
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
About Ares Commercial Real Estate Corporation
Ares Commercial Real Estate Corporation is a specialty finance
company primarily engaged in originating and investing in
commercial real estate loans and related investments. Through its
national direct origination platform, the Company provides a broad
offering of flexible and reliable financing solutions for
commercial real estate owners and operators. The Company originates
senior mortgage loans, as well as subordinate financings, mezzanine
debt and preferred equity, with an emphasis on providing value
added financing on a variety of properties located in liquid
markets across the United States. Ares Commercial Real Estate
Corporation elected and qualified to be taxed as a real estate
investment trust and is externally managed by a subsidiary of Ares
Management Corporation. For more information, please visit
www.arescre.com. The contents of such website are not, and should
not be deemed to be, incorporated by reference herein.
Forward-Looking Statements
Statements included herein, may constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities and Exchange Act of 1934,
as amended, which relate to future events or the Company’s future
performance or financial condition. Such statements are intended to
be identified by using words such as “believe,” “expect,” “intend,”
“estimate,” “anticipate,” “will,” “project,” “plan” and similar
expressions in connection with any discussion of future operating
or financial performance. Readers are cautioned not to put undue
reliance on such forward-looking statements. These statements are
not guarantees of future performance, condition or results and
involve a number of risks and uncertainties. Actual results may
differ materially from those in the forward-looking statements as a
result of a number of factors, including the risks described from
time to time in its filings with the Securities and Exchange
Commission. Any forward-looking statement, including any contained
herein, speaks only as of the time of this press release and Ares
Commercial Real Estate Corporation undertakes no duty to update any
forward-looking statements made herein.
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version on businesswire.com: https://www.businesswire.com/news/home/20210129005108/en/
Investor Relations Contact: Ares Commercial Real Estate
Corporation Carl Drake or Veronica Mendiola Mayer (888)-818-5298
iracre@aresmgmt.com
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