Criimi Mae Raises Its Loss Estimate and Adds New Risk Manager to Staff

Criimi Mae is increasing its estimate of losses over the life of its commercial mortgage-backed securities portfolio from $448 million to approximately $500 million.

The real estate investment trust has also appointed Craig M. Lieberman to the newly-created position of chief portfolio risk officer.

Mr. Lieberman is responsible for efforts to maximize the value of the REIT's CMBS portfolio. He oversees the company's servicing operations and will focus initially on "developing new, more accelerated workout strategies for loans in special servicing."

The commercial mortgage investor expects to announce an impairment charge to its fourth-quarter 2002 earnings.

Barry S. Blattman, who recently took over as CEO and president of Criimi Mae, said, "This higher estimate of losses is warranted by difficult conditions in the commercial real estate market, particularly the hotel sector."

He added that the estimate is within the range expected by Brascan Real Estate Finance Fund when Criimi Mae was recapitalized in January.

The company has also declared the deferred payment of dividends for the second quarter of 2002 on its preferred stock. Shareholders of record on March 17, 2003 received $0.68 per Series B share, $0.30 per Series F share and $0.375 per Series G share in cash.

The company's new financing arrangement, which is more flexible, allows for the payment of cash dividends, according to Criimi Mae. Mr. Blattman noted that the projected cash flows from Criimi Mae's CMBS portfolio and other assets "are well in excess of the amount needed to cover the preferred dividends and provide funds for other aspects of our business, including acquisitions, hedging activities or the maintenance of liquidity."

Criimi Mae expects that its assets will generate a cash flow of approximately $65 million to $70 million for 2003.

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