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Monday, 04 April 2011

American Capital Looks to Raise Public Equity for Mortgage Investments

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Commercial Real Estate Direct Staff Report

American Capital Ltd., a private-equity firm that became an active player in the CMBS B-piece market in 2005, has filed to launch another mortgage REIT that would invest in CMBS as well as residential mortgages and securities.

The REIT, American Capital Mortgage Investment Corp., has filed registration material with the SEC to raise up to $500 million through a stock offering led by Citi.

Its aim, according to a prospectus for its stock offering, is to put together a portfolio of mortgage investments that would provide it and its investors with "attractive risk-adjusted returns across a variety of market conditions and economic cycles." It added that it believed the role of government-sponsored enterprises, Fannie Mae and Freddie Mac, will be reduced in the coming years. As that happens, potentially attractive investment opportunities should materialize. It said it would invest primarily in non-agency issued mortgages and securitizations.

It will also invest in CMBS, particularly subordinate CMBS, as well as commercial mortgages, according to its prospectus.

The company provides capital to middle-market companies by making equity investments or providing debt and funding its activities by placing equity and debt in the public and private markets.

American Capital is no stranger to the CMBS sector. It got into the sector in 2005, when it hired Doug Cooper as managing director. He previously had helped run the B-piece investing operation of CWCapital and Allied Capital Corp. before that.

The REIT is led by Gary Kain, president and chief executive, who joined American Capital two years ago from Freddie Mac, where he was senior vice president of investments and capital markets.

Since 1997, American Capital has raised more than $10 billion of equity through common-stock offerings, $2 billion of debt and $2 billion of private-equity capital. It has also completed $5 billion of securitizations.

In the CMBS market, it was among the top buyers of B-pieces while it participated in the sector. Between 2005 and 2007, it bought the subordinate classes of 17 transactions totaling $55.2 billion. Its investments were hammered as a result of the collapse in the credit markets. In late 2009, it reported that the $1.3 billion of bonds it had purchased for $705.2 million had fallen in value to $107.6 million.

Comments? E-mail Orest Mandzy, or call him at (267) 247-0112, Ext. 211.


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“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Mortgages/Financing (MOR), REITS -general (REITS), Stock/Equity Offerings (IPO)
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Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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