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Redwood Trust Closes on Commercial Securitization

NOV 29, 2012 1:33pm ET
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Redwood Trust, Mill Valley, Calif., said it has closed on a $291 million securitization of mezzanine loans and other subordinate commercial real estate debt.

“The commercial mortgage market requires significant capital to refinance. There has been a hole,” chief executive officer Marty Hughes said during a JPMorgan investor conference. “We stepped into the breach in the mezzanine space.”

A portfolio of 30 collateral interests tied to 76 underlying diversified properties from multifamily, office, hospitality, retail, self-storage and mixed-use sectors are part of the deal.

The publicly traded REIT said roughly $172 million of debt was issued in the transaction, which was offered pursuant to a private placement with Redwood retaining the equity interest in the portfolio.

The notes have a fixed interest rate of about 5.62% and received respective ratings of Baa3(sf)/BBB-(sf) from Moody’s Investors Service and Kroll Bond Rating Agency. UBS Securities LLC acted as lead manager/sole book runner and Wells Fargo Securities LLC acted as co-manager.

Redwood also is known for its securitizations in the single-family residential space where it has been the only consistent issuer of private-label jumbo deals backed by recent originations.

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