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Amherst Capital sponsors debut $400M CRE-CLO

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Amherst Capital Management is offering up its first CRE-CLO consisting of bridge real estate loans for transitional properties.

ACAM 2019-FL1 is a $400.27 million portfolio of commercial mortgage assets, consisting of whole loans as well as senior pari-passu participations in real estate loans or notes from 21 obligors.

The property types in the pool are led by volatile hospitality assets making up 27.7% of the collateral, but most of the balance (66.7%) is tied to office, industrial and retail properties in transitional stages.

All of the assets are credit-assessed as below investment grade by Moody’s. About 75% of the initial asset pool are entirely interest-only.

The capital stack includes a $205.6 million Class A tranche with preliminary triple-A ratings from Moody’s Investors Services and DBRS Morningstar. The notes have an expected coupon of 130 basis points over one-month Libor.

The deal has a two-year noncall and reinvestment period. According to presale reports, the transaction is expected to have a weighted average life of 3.2 years, and is covenanted at a maximum of 5.5 years.

The deal was underwritten by Goldman Sachs, Barclays and Amherst Pierpont.

The largest loan in the pool is a $40.5 million pari passu participation for the Leeds Park International industrial development in North Charleston, S.C., near the fast-growing Port of Charleston. The owners plan a $15 million investment in leasing expenses and capital improvements, including the reconfiguration into flex space.

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