Colony Mortgage Capital plans to finance its next pool of levered loans in a capital markets transaction dubbed Colony 2014-FL2.
The issuer is an indirect subsidiary of Colony Financial, which was formed in the second half of 2013 to originate floating rate bridge loans secured by transitional CRE assets, selective mezzanine loans and preferred equity.
The transaction is similar to the first CLO securitization the issuer did in April 2014. On its third quarter 2014 earning call the company said its Commercial Real Estate Lending Real Estate Lending business continues to grow at a rapid pace. The platform is on track to close in excess of $700 million of loans for 2014.
In the latest deal, Colony plans to offer $30 million in securities backed by CRE loans, according to Kroll Bond Ratings Agency.
Six classes of notes will be issued that are all due November 2031. KBRA plans to rate the class A notes AAA’; the class B notes AA-’; the class C notes A-’; the class D notes BBB-’; the class E notes BB-’ and the class F notes B-’.
The pool consists of 15 mortgage loans that are backed by 37 properties. The loans are highly levered with a weighted average of 115.1%. Three of the loans, which make up 33.6% of the pool, allow for the future funding of pari passu companion debt. The debt will be held outside the securitization trust. All of the loans were originated between April and October 2014.
In April Colony issued its first CRE CLO transaction, rated by S&P. The deal offered $190 million in securities backed by a pool of 11 commercial mortgage loans on transitional properties, and secured by 13 properties.
Colony said during the earnings call that it expected origination volumes from in CRE lending platform to double in 2015.