Anthracite Capital priced a $249.5 million CDO last week to serve as a matched term funding source for a $478 million portfolio of two recently purchased CMBS deals and REIT debt. The CDO is the fifth for Anthracite, a REIT that invests in high-yield CMBS and is managed by BlackRock Financial Management.
The two CMBS transactions carried a purchase price of $66.8 million, 59% of the total par amount of $113.3 million, according to Anthracite. Anthracite plans to use a ramp-up facility to finance up to $100 million of additional high yield CMBS to be acquired over the next nine months. Anthracite will retain the triple-B minus rated class of the CDO, as well as $115 million of par value non-investment grade debt and all of the deal's preferred shares. The weighted average cost of funds for bonds issued by the CDO is being estimated at 5.40%.
The CDO is the smallest yet for Anthracite, which currently manages roughly $1.7 billion through its four previous CDO offerings, two last year and two in 2002. Deutsche Bank Securities served as the underwriter for all of those transactions. Its last issue was Anthracite 2004-HY1, a $342 million cash flow deal that came to the market last November. The deal's triple-A rated $23.8 million A tranche, maturing June 2041, priced with a 4.712% coupon.
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