For additional information that management believes to be useful for investors, please refer to the “Quarterly Supplement – Third Quarter 2012” presentation posted to the Investor Relations section of Newcastle’s website,
For consolidated investment portfolio information, please refer to the Company’s Annual Report on Form 10-K or Quarterly Report on Form 10-Q
which are also available on the Company’s website,
THIRD QUARTER 2012 EVENTS & INVESTMENT ACTIVITY
$167 million of common equity raised:
In July 2012, the Company completed the sale of approximately 25 million shares of its common stock at a price of $6.63 per share for net proceeds of approximately $167 million.
CDO X sale:
In September 2012, the Company completed the sale of 100% of its interests in CDO X to the sole owner of the senior notes and another third party, in connection with the liquidation and termination of CDO X. The Company received $130 million for $90 million face amount of subordinated notes and all of its equity in CDO X.
In addition, Newcastle deconsolidated the deal from its balance sheet, which reduced total assets by $1.1 billion and total liabilities by $1.2 billion. As a result, the Company recorded a $224 million gain on sale, increased GAAP book value by $1.22 per share, and decreased its debt to equity ratio from 3.8 to 2.2.
$205 million of unrestricted cash invested primarily in the following:
$50 million: Collateral formerly held in CDO X
In connection with the liquidation of CDO X, Newcastle negotiated the purchase of eight securities and loans. Prior to the sale of the Company’s CDO X interests to the senior note holder, it invested $50 million to purchase $101 million face amount of assets at an average price of 49.4% of par. The Company expects to generate $100 million of cash flow or $50 million of profit over an average of 2.4 years. This purchase includes five Non-Agency residential securities with a face amount of $45 million, two bank loans with a face amount of $29 million, and one NCT CDO security with a face amount of $27 million.