Ares Commercial Real Estate Corporation Closes $667 Million CRE CLO
NEW YORK–(BUSINESS WIRE) – Ares Commercial Real Estate Corporation (NYSE: ACRE) (the “Company” or “ACRE”) announced today that it has a secured commercial real estate loan commitment of approximately US $ 667 million through wholly-owned indirect subsidiaries ( “CRE CLO”) has closed ”). CRE CLO financed shares in 23 senior loans with an initial advance of 81% and an initial weighted average coupon of one month LIBOR + 1.17% excluding transaction costs. The CRE CLO is a match term, no recourse, and no mark-to-market funding for the company.
The CRE CLO transaction offered the company the following benefits:
Reduced weighted average cost of funds
Increase in non-recourse financing from 36% as of September 30, 2020 to 67% of the total outstanding amounts under the financing facilities and securitisations
ACRE closed in $ 146 million in new loans previously held in Ares’ real estate debt warehouse
These benefits are expected to have a positive impact on the company’s bottom line.
“We are very pleased with the performance of our fourth securitization in the current market environment, which we believe confirms the strong credit quality of our loan portfolio and the value of the broader Ares Management franchise,” said Bryan Donohoe, chief executive officer of ACRE. “The securitization has allowed us to optimize the funding of our existing assets by paying back outstanding amounts under our secured funding facilities and enable ACRE to close seven new loans totaling $ 146 million.”
“This is a financially positive transaction for our company that will improve our bottom line,” said Tae-Sik Yoon, chief financial officer of ACRE. “Our ability to borrow $ 146 million in new loans at the same time as the CRE CLO closes is another example of how Ares ACRE’s real estate debt storage facility brings significant benefits.”
This press release does not constitute an offer, solicitation or solicitation of an offer to buy, nor will any sale of these securities be made in any state or jurisdiction in which such offer, solicitation or sale is unlawful prior to registration or qualification under the law would be the securities laws of such state or jurisdiction.
About the Ares Commercial Real Estate Corporation
Ares Commercial Real Estate Corporation is a specialty finance firm that primarily raises and invests in commercial real estate loans and related investments. Via its national platform for direct allocation, the company offers a wide range of flexible and reliable financing solutions for commercial property owners and operators. The company provides senior mortgage, subordinated finance, mezzanine debt and preferred capital with a focus on providing value-added finance for a variety of properties located in liquid markets in the United States. Ares Commercial Real Estate Corporation was selected and qualified as a real estate mutual fund to be taxed by it. It is managed externally by a subsidiary of Ares Management Corporation. More information is available at www.arescre.com. The content of this website is not incorporated herein by reference and should not be taken as such.
The statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, which may arise relate to future events or the future performance or financial condition of the company. Such statements are intended to be identified using words such as “believe,” “expect,” “intend,” “estimate,” “anticipate,” “will,” “project,” “plan” and similar expressions in connection with any discussion future operational or financial performance. Readers are cautioned not to place undue reliance on such forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results could differ materially from those in the forward-looking statements due to a number of factors, including the risks described from time to time in filings with the Securities and Exchange Commission. All forward-looking statements, including those contained herein, speak only as of the date of this press release, and Ares Commercial Real Estate Corporation assumes no obligation to update the forward-looking statements contained herein.