ACRES Commercial Realty Corp. Announces Pricing of a $700 Million CLO Backed by Commercial Mortgage Loans

UNIONDALE, NY, December 7, 2021 / PRNewswire / – ACRES Commercial Realty Corp. (NYSE: ACR) (the “Company”) announced that its newly formed subsidiaries, ACRES Commercial Realty 2021-FL2 Issuer, Ltd. (the “Issuer”) and ACRES Commercial Realty 2021- FL2 Co-Issuer, LLC (together with the Issuer, the “Co-Issuer”) $ 567.0 million of Non-Recourse Floating Rate Notes (the “Offered Notes”, the “Securities” or the “Offer”) at a weighted average price of the one month London Interbank Offered Rate (“LIBOR”) +180 basis points.

Mark Fogel, President and CEO of the company, said: “We are very pleased to announce the execution of our second managed CLO in 2021. Overall, these two CLOs give the company the opportunity to manage up to approx $ 1.5 billion of commercial real estate (“CRE”) initial mortgage loan at a weighted average rate of LIBOR + 163 basis points. The transaction includes start-up and reinvestment features that give the company flexibility and allow it to fund part of its growing future mortgage loan pipeline at the rates set; Supervised by ACRES’s highly skilled asset management team. We would like to thank all of the members of the Syndicate for their excellent work in bringing this result to the company. “

Notes offered include:

• $ 385.0 million Class A bonds rated Aaa (sf) by Moody’s Investors Service, Inc. and AAA (sf) by DBRS, Inc. (“DBRS Morningstar”), and are issued at a coupon of LIBOR + 140 basis points ;
• $ 30.6 million Class AS bonds rated AAA (sf) by DBRS Morningstar and issued at a coupon of LIBOR + 175 basis points;
• $ 38.5 million Class B bonds rated AA (low) (sf) by DBRS Morningstar and issued at a coupon of LIBOR + 225 basis points;
• $ 47.3 million Class C bonds rated A (low) (sf) by DBRS Morningstar and issued at a coupon of LIBOR + 265 basis points;
• $ 51.6 million Class D bonds rated BBB (sf) by DBRS Morningstar and issued at a coupon of LIBOR + 310 basis points; and
• $ 14.0 million Class E bonds rated BBB (low) (sf) by DBRS Morningstar and issued at a coupon of LIBOR + 400 basis points.

The transaction is expected to be through to completion December 21, 2021, subject to customary closing conditions being met. As of the reporting date, the Offered Bonds are through variable-rate CRE first mortgage loans and participations in first mortgage loans of the company with a total outstanding amount of approx. secured $ 558.8 million (including a loan with a delayed completion totaling approx. $ 40.6 million). The transaction has been structured with a 180-day acquisition ramp-up period during which the issuer may use funds from the unused proceeds account to acquire mortgage assets that meet certain eligibility criteria. The transaction has also been structured with a 24 month reinvestment period during which the issuer may reinvest the principal proceeds from the mortgage claims to acquire additional mortgage loans and equity loan interests that meet certain eligibility criteria. The Company will retain the Class F and Class G Subordinated Notes and the Preferred Stock in the transaction.

The securities will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and may not be publicly offered or sold The United States lack of registration or a corresponding exemption from the registration requirement. The offering was made privately in transactions that are exempt from the registration requirements of the Securities Act. This press release is not an offer to sell any securities of the Company or any of the co-issuers or the solicitation of an offer to buy such securities. This press release contains statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that are difficult to predict, many of which are beyond the control of management.

Factors that could affect future results are discussed in filings the company filings with the Securities and Exchange Commission from time to time.

About ACRES Commercial Realty Corp.

ACRES Commercial Realty Corp. is a real estate investment trust primarily focused on the issuing, holding and management of commercial real estate mortgage loans and other commercial real estate related debt. The company is externally owned by ACRES Capital, LLC, a subsidiary of ACRES Capital Corp., a private commercial real estate lender that specializes exclusively in nationally lending to medium-sized commercial real estate with a focus on apartment buildings, student dormitories, hospitality, industrial and office properties in top retail locations focused, manages US markets. For more information, please visit the company’s website at www.acresreit.com or contact Investor Relations at [email protected].

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be made through our use of forward-looking terminology such as “may”, “trend”, “will”, “continue”, “expect”, “intend”, “anticipate”, “estimate”, “” believe “,” “Looking ahead,” or similar words or expressions. Because such statements involve risks, uncertainties and contingencies, actual results could differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied in such forward-looking statements .

Factors that could affect future results are discussed in filings the company filings with the Securities and Exchange Commission from time to time. The company undertakes no obligation to update or revise any forward-looking statements to reflect new or changing information or events after the date of this publication or the occurrence of unforeseen events, except as required by law.

SOURCE ACRES Commercial Realty Corp.