CRIIMI Takes Loss On Loan Refinance
Criimi Mae has refinanced a 7%, $45.7 million collateralized mortgage obligation and expects to take a financial statement loss, which will be recognized in the second quarter, of about $1.1 million as a result.
The commercial mortgage real estate investment trust expects the refinancing to result in cost savings as a result of a $2 million reduction in associated interest costs.
As well, the refinancing netted about $3.4 million in cash for the REIT because the CMO was overcollateralized, Criimi reports. "As a result of exercising the 'cleanup' call on CMO-1, the early extinguishment of debt will result in a financial statement loss of approximately $1.1 million related to the unamortized discount and deferred financing costs associated with the CMO," Criimi said in a June statement.
The REIT used proceeds from the sale of $17.7 million of FHA mortgage loans that partially secured the debt and $31.4 million available under a $200 million repurchase facility with a Bear Stearns unit to redeem the debt.
Criimi Mae is retaining a 50% interest in the interest paid on the FHA loans.
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