NEW YORK— Ready Capital Corporation, a multi-strategy real estate finance company that originates, acquires, finances and services small- to medium-sized balance commercial loans, announced the completion of two securitizations, totaling $609 million, in the second quarter of 2020.
First, a $405 million commercial real estate collateralized loan obligation secured by 56 originated floating-rate transitional loans. The Company sold 80% of the capital structure to investors with a weighted average blended interest rate of LIBOR plus 236 basis points and the most senior bond priced at LIBOR plus 215 basis points. Second, a $204 million fixed-rate securitization of 228 acquired small balance commercial real estate loans.
The Company sold 85% of the capital structure to investors with a weighted average blended interest rate of 4.0% and the most senior bond priced at 3.43%. The proceeds from the securitizations were used to reduce the Company’s secured borrowings by approximately $430 million and generated approximately $60 million in cash.
At June 30, 2020, the Company had unencumbered cash of approximately $225 million, an increase from the Company’s March 31, 2020 unencumbered cash balance of $122 million, and secured borrowings of approximately $1.2 billion, a 25% decrease compared to the Company’s March 31, 2020 secured borrowings balance.
“We are very pleased with the successful completion of two securitizations in this challenging market and believe the attractive pricing reflects the markets positive view of our small-to-medium business lending model,” said Thomas Capasse, Chairman and Chief Executive Officer. “In the face of increased volatility and market instability, the closing of these securitizations is a testament to our focus on increasing liquidity and reducing mark-to-market liabilities. These transactions enhance our liquidity to further support our opportunistic growth initiatives in the current market environment.”