© 2020 Arizent. All rights reserved.

TPG marketing largest CRE CLO of 2019 in $1.23B deal

Register now

TPG Real Estate Finance Trust (NYSE: TRTX), a real estate investment trust controlled by private equity firm TPG Capital, is sponsoring the largest CRE CLO to date in 2019.

TGP is marketing the $1.23 billion TRTX 2019-FL3 Issuer, Ltd. Transaction, which has an initial pool of 22 borrowers of interest-only bridge loans on properties undergoing rehabilitation or conversion.

The commercial real estate CLO deal is the third for the REIT, which last year issued two CRE CLO deals totaling $1.93 billion.

The collateralized loan obligation/CDO structure has become an increasingly attractive way to finance CRE lending that has traditionally been kept on balance sheet of lenders – and a burgeoning tool for PE firms finance real estate acquisitions and development/renovation costs.

The largest CRE CLO top price in 2019 was the $936 million STWD 2019-FL! Deal sponsored by Starwood Capital Group Global in July.

TRTX 2019-FL3 has eight classes of senior and subordinate notes, including a $621.3 million Class A notes tranche with an assumed coupon of Libor plus 1.25%, according to a presale report from Moody’s Investors Service. The Class A notes have a preliminary Aaa rating from Moody’s.

Moody’s does not rate the surbordinate/mezzanine notes or a $186.1 million Class A-S tranche that is second in the collateral consists mostly of multifamily properties (45% of the pool’s assets) and office buildings (30.5%). Hotels also make up 11.8% of the initial pool of loans.

The largest loan is in the pool is a $110 million loan for a Florida apartment portfolio.

According to Moody’s, the deal has a weighted average life of 5.5 years, a ratings factor average of 4770 and a WA spread of 2.5%.

All of the assets are considered below investment-grade (Caa1 or below).

The transaction is underwritten by JPMorgan, Goldman Sachs, Morgan Stanley, Wells Fargo and U.S. Bancorp.

For reprint and licensing requests for this article, click here.
CRE CLO
MORE FROM ASSET SECURITIZATION REPORT