Cohen & Co. has sold its rights to Alesco collateral management to ATP Management.
ATP is managing $3.8 billion in assets and has the collateral management rights and responsibilities from the sale of Alesco securitizations, which represent $3 billion in assets.
ATP will pay Cohen a total of $9.5 billion plus an earn-out equal to 50% of all management fees collected over a seven-year period that are in excess of an agreed upon amount . This could potentially result in payments of up to $12 million over the seven - year period depending primarily on the level of defaults and prepayments experienced in the securitizations.
Additionally, Cohen has entered into a three-year services agreement under which it will provide certain services to ATP. ATP has agreed to pay $23 million over that time.
Dekania Investors, a Cohen subsidiary, also entered into a new $14.6 million secured credit facility with TD Bank. This new credit facility expires in September 2012, and replaces Cohen’s previous $30 million revolving credit facility that was due to expire on May 31, 2011.
The current minimum annual interest rate of the credit facility is 6%, which is less than the minimum annual interest rate of 8.5% on the previous $30 million revolving credit facility. Proceeds will be used to finance working capital requirements and for general corporate purposes, according to Cohen.
Meanwhile, Cohen & Co. Securities, another Cohen subsidiary, has offered to buy all of the outstanding unsecured subordinated promissory notes issued by Cohen Brothers with a current principal balance of $9.5 million.
Cohen & Co. is an investment firm specializing in credit]related fixed income investments.