Back in January, CapitalSource made its REIT status official, and thus made a lot of progress toward lowering its cost of funds and separating its real estate securitization activities from the rest of its securitization program. After pricing the CapitalSource Real Estate Loan Trust 2006-A just over a week ago, the separation is complete.

The $1.3 billion 144a transaction, for which Wachovia Securities acted as lead manager, is the company's first securitization backed purely by commercial real estate loans. Many of the loans are on healthcare properties, specifically long-term care facilities with skilled nursing. Previously, the company had financed its commercial loan portfolio by putting those assets into the CapitalSource Commercial Loan Trust, which also securitized asset-based and cash flow based loans, according to someone familiar with the situation. To date, the company has done 10 securitizations, and the previous nine were done through the Commercial Loan Trust.

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