ACRES Commercial Realty Corp. Announces Pricing of an $803 Million CLO Backed by Commercial Mortgage Loans

WESTBURY, NY, May 7, 2021 / PRNewswire / – ACRES Commercial Realty Corp. (NYSE: ACR) (the “Company”) announced that its newly formed subsidiary ACRES Commercial Realty 2021-FL1 Issuer, Ltd. (the “Issuer”) and ACRES Commercial Realty 2021- FL1 Co-Issuer, LLC (together with the Issuer, the “Co-Issuers”) will issue $ 675.2 million of non-recourse floating rate debt securities (“Offered Notes”, “Securities” or “Offering”) at the weighted average cost of the one-month London Interbank Offered Rate (“LIBOR”) + 149 basis points.

Mark FogelThe company’s President and CEO stated, “We are very pleased with the execution of our first managed CLO. We believe our origination pipeline will allow us to take full advantage of the reinvestment capabilities of the transaction and our experienced asset management team will provide that.” the support and control for the deal. “

The bonds offered include:

  • $ 431.4 million Class A Notes rated Aaa (sf) by Moody’s Investors Service, Inc. and AAA (sf) by DBRS, Inc. (“DBRS Morningstar”) with a coupon of LIBOR + 120 basis points;
  • $ 100.3 million Class AS bonds rated AAA (sf) by DBRS Morningstar and issued with a coupon of LIBOR + 160 basis points;
  • $ 37.1 million Class B Notes rated AA (Low) (sf) by DBRS Morningstar with a coupon of LIBOR + 180 basis points;
  • $ 43.1 million Class C Notes rated A (Low) (sf) by DBRS Morningstar with a coupon of LIBOR + 200 basis points;
  • $ 50.2 million Class D bonds rated BBB (sf) by DBRS Morningstar and issued with a coupon of LIBOR + 265 basis points; and
  • $ 13.0 million Class E bonds rated BBB (low) (sf) by DBRS Morningstar with a coupon of LIBOR + 310 basis points.

The transaction is expected to be completed May 12, 2021subject to customary closing conditions being met. As of the reporting date, the bonds offered are secured (i) by variable rate primary mortgage loans for commercial real estate and investments in primary mortgage loans taken out or acquired by the Company with an outstanding total nominal amount of approximately $ 802.6 million (including a late final loan totaling approx. $ 34 million). The transaction has also been structured with a 24 month reinvestment period during which the issuer can use the capital proceeds to purchase 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 of 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 an applicable exception to registration requirements. The offer 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 number 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 the Company’s 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 devoted solely to nationwide CRE lending for the middle class, with a focus on multi-family, student housing, hospitality, industrial and office real estate, led US markets. Further information is available on the company’s website at www.acresreit.com or from 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 identified by the use of forward-looking terminology such as “may”, “trend”, “will”, “continue”, “expect”, “intend”, “anticipate”, “estimate”. Because such statements contain risks, uncertainties and contingent liabilities, actual results could differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed by such forward-looking statements be expressed or implied.

Factors that could affect future results are discussed in the Company’s 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 document, or to reflect the occurrence of unexpected events, except as required by law.

SOURCE ACRES Commercial Realty Corp.