Varde Partners has closed its second commercial real estate collateralised loan obligation (CRE CLO) this year – a $462 million deal that follows one closed in February, the Minneapolis-based firm said in a statement.
The most recent CRE CLO consisted of a pool of 25 floating-rate mortgages with an unpaid balance of $457.8 million backed by 27 properties, which include office, multifamily, hospitality and industrial properties, among others. Varde sold $362.3 million of bonds rated AAA through BBB-.
The February transaction was a $368 million deal that packaged together 25 recently-originated, short-term, floating-rate whole or pari passu mortgage assets backed by 28 properties. In that deal, the firm sold $288 million of bonds across the same rating spectrum as its latest transaction. Varde retained $80 million.
In addition, Fortress Investment Group received ratings on eight classes of securities for what will be its second-ever CRE CLO – a $600 million securitisation that will be secured by 19 CRE whole loans. The proceeds from 15 loans were used to acquire properties, while the funding received from the four remaining loans were used to refinance existing debt.
CRE CLOs have been issued at a rapid clip this year. Through the beginning of August, some $6 billion in CRE CLO had been issued across 11 issuers and 11 transactions, with the dollar total surpassing 2016’s total volume of $2.5 billion, executives from Crescit Capital Strategies wrote in Pensions & Investments.