Gramercy Capital Corp. Announces an Agreement to Sell its Collateral Management Agreements for its Collateralized Debt Obliga...
31 Janeiro 2013 - 7:30PM
Business Wire
Gramercy Capital Corp. (NYSE: GKK) announced today the
execution of a definitive agreement to transfer the collateral
management and sub-special servicing agreements for its three
Collateralized Debt Obligations, CDO 2005-1, CDO 2006-1 and CDO
2007-1, to CWCapital Investments LLC (“CWCapital”) for
approximately $9.9 million, less adjustments and closing costs.
The Company will retain its equity interests in the three CDOs,
which will provide the Company with the potential to recoup
additional proceeds over the remaining life of the CDOs based upon
resolution of underlying assets within the CDOs. Subject to
customary closing conditions, the transfer is expected to close in
March 2013.
The Company intends to liquidate its CDO bond portfolio. The
Company also expects to receive additional cash proceeds for past
CDO servicing advances of approximately $14.0 million when specific
assets within the CDOs are liquidated.
The summary of the transaction is as
follows:
Amount
Timing
Collateral Management Agreements $9.9 million 45 days CDO Equity
Retained Liquidation of CDOs CDO Bonds $32.0 million 30-90 days CDO
Advances $14.0 million Majority expected within 6-9 months
The transaction achieves a number of important objectives:
- It maximizes the value of the servicing
business through the sale to a large platform that has significant
scale;
- It greatly simplifies the going-forward
business and significantly reduces the Company’s ongoing MG&A
expenses through elimination of CDO related personnel costs and
servicing advance requirements;
- It unlocks in excess of $50.0 million
in liquidity currently invested in the CDO business; and
- It allows the Company to retain
potential future upside in the equity in the three CDOs.
Gordon F. DuGan, Chief Executive Officer of Gramercy Capital
Corp., commented, “This sale is a significant milestone in the
transformation of Gramercy into a pure-play equity REIT. We are
pleased to reach this agreement with CWCapital, a world-class real
estate organization. With this transaction, we expect to achieve a
number of important goals including an expected increase in
corporate liquidity, a significant reduction in going-forward
expenses, and a simplification of the balance sheet. We are very
well positioned to continue our focus on creating durable,
high-quality income from net lease assets throughout the United
States.”
About Gramercy Capital Corp.
Gramercy Capital Corp. is a self-managed, integrated commercial
real estate investment and asset management company. The Company
owns, directly or in joint venture, a portfolio of 115 office and
industrial buildings totaling approximately 4.9 million square
feet, net leased on a long-term basis to tenants, including Bank of
America, Nestlé Waters, Philips Electronics and others. The
Company’s Gramercy Realty division currently manages approximately
$1.2 billion of commercial properties leased primarily to regulated
financial institutions and affiliated users throughout the United
States. The Gramercy Finance division manages approximately $1.7
billion of whole loans, bridge loans, subordinate interests in
whole loans, mezzanine loans, preferred equity, commercial
mortgage-backed securities and other real estate securities which
are financed through three non-recourse CDOs. The Company is
headquartered in New York City and has regional investment and
portfolio management offices in Jenkintown, Pennsylvania,
Charlotte, North Carolina, and St. Louis, Missouri.
To review the Company’s latest news releases and other corporate
documents, please visit the Company's website at www.gkk.com or
contact Investor Relations at 212-297-1000.
About CWCapital Investments LLC
CWCapital and its affiliate CWCapital Asset Management are
wholly owned subsidiaries of CW Financial Services LLC. CWCapital
manages or acts as disposition consultant on 23 CRE-CDO
transactions and is based in Bethesda, Maryland. Also based in
Bethesda is CWCapital Asset Management the special servicing
platform. CWCapital Asset Management is one of the largest special
servicers in the Unites States. CWCapital Asset Management is the
named special servicer on 155 CMBS transactions backed by an
approximate $140 billion of commercial mortgage loans as well as $5
billion in non-securitized loans for institutional clients
(totaling approximately 12,600 loans). In recognition of its
demonstrated skill and performance, the platform has been awarded
the rating of CSS1- by Fitch Ratings, as well as the highest
ranking of Strong by Standard & Poor’s.
Forward-Looking Information
This press release contains forward-looking information based
upon the Company's current best judgment and expectations. Actual
results could vary from those presented herein. The risks and
uncertainties associated with forward-looking information in this
release include, but are not limited to, factors that are beyond
the Company's control, including the closing of the transfer of the
collateral management and sub-special servicing agreements, the
subsequent sale of the CDO bond portfolio, the return of the CDO
protective advances, the resolution of underlying assets within the
CDOs and the receipt of any proceeds from its CDO equity,
CWCapital’s ability to manage and service the assets within the
CDOs, the Company’s ability to simplify its balance sheet and
reduce going forward expenses, the implementation of the Company’s
new business strategy, the integration of the Company’s new
management team, the results of the operational review and those
factors listed in the Company's Annual Report on Form 10-K and in
the Company's Quarterly Reports on Form 10-Q. The Company
undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. For further information, please refer to the
Company's filings with the SEC.
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