To help pay for the portfolio, Zais tapped its financing facility from Citibank for $54.8 million. That line of credit is for $150 million; at the end of May, the company did a draw of $78.5 million of the line to fund a portion of its purchase of a loan portfolio with an unpaid principal balance of $136.6 million, also from an unknown seller.
The latest deal puts Zais in the 50% to 60% range of the whole loan equity allocation that it was looking to achieve at the time of its initial public offering back in February, said president and CEO Michael Szymanski.
He added “we continue to believe in our investment strategy focusing on residential mortgage credit primarily through whole loan exposure. This investment is well suited to our strategy and the current investment environment.”