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Thursday, 29 July 2010

LNR Completes Recap; Slashes $875Mln of Debt

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LNR Property Corp. has completed its proposed recapitalization, raising $417 million of fresh equity and reducing its indebtedness to $425 million from some $1.3 billion.

The equity was raised from a group of investors that include Vornado Realty Trust, iStar Financial, and affiliates of Cerberus Capital Management and Oaktree Capital Management.

Cerberus, Vornado and iStar each had been involved in the Miami company's $3.8 billion leveraged buyout in 2005. Cerberus led that acquisition, while Vornado provided $135 million of mezzanine debt. IStar made a small equity investment.

LNR said it used the equity it raised, along with cash on hand, to retire $426 million of an $851 million loan. In addition, LNR's parent, Riley Holdco Corp., retired a $450 million issue of notes that were due in 2015 by swapping it for equity in LNR.

"Moving forward with world-class equity investors, a strong balance sheet and healthy cash flow, LNR will be well-positioned to capitalize on opportunities in the commercial real estate market," said Tom Hughes, the company's chief executive. 

Lazard and Goldman Sachs were LNR's financial advisers, while Schulte, Roth and Zabel was counsel to LNR and Cerberus. Dewey & LeBoeuf served as restructuring and governance counsel to LNR.

Vornado's outside counsel were Sullivan & Cromwell, Roberts & Holland and Cadwalader, Wickersham & Taft. IStar's counsel was Katten Muchin Rosenman and Debevoise & Plimpton was counsel to Oaktree.

LNR is the CMBS industry's most active special servicer. As of the end of June, it was actively managing 1,320 loans with a balance of $23.8 billion, or 27.4 percent of all CMBS loans in special servicing.

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

 



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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Commercial MBS (CMBS), Mortgages/Financing (MOR)
  • Deal Name: Bear Stearns Commercial Mortgage Securities Trust, 2006-PWR12
  • Company: LTC Properties Inc.
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