This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gramercy Capital Corp. Announces An Agreement To Sell Its Collateral Management Agreements For Its Collateralized Debt Obligations (“CDOs”) To CWCapital And Retain The Equity In Its CDOs

Gramercy Capital Corp. (NYSE: GKK) announced today the execution of a definitive agreement to transfer the collateral management and sub-special servicing agreements for its three Collateralized Debt Obligations, CDO 2005-1, CDO 2006-1 and CDO 2007-1, to CWCapital Investments LLC (“CWCapital”) for approximately $9.9 million, less adjustments and closing costs.

The Company will retain its equity interests in the three CDOs, which will provide the Company with the potential to recoup additional proceeds over the remaining life of the CDOs based upon resolution of underlying assets within the CDOs. Subject to customary closing conditions, the transfer is expected to close in March 2013.

The Company intends to liquidate its CDO bond portfolio. The Company also expects to receive additional cash proceeds for past CDO servicing advances of approximately $14.0 million when specific assets within the CDOs are liquidated.

The summary of the transaction is as follows:


Collateral Management Agreements $9.9 million 45 days
CDO Equity Retained Liquidation of CDOs
CDO Bonds $32.0 million 30-90 days
CDO Advances $14.0 million Majority expected within 6-9 months

The transaction achieves a number of important objectives:
  • It maximizes the value of the servicing business through the sale to a large platform that has significant scale;
  • It greatly simplifies the going-forward business and significantly reduces the Company’s ongoing MG&A expenses through elimination of CDO related personnel costs and servicing advance requirements;
  • It unlocks in excess of $50.0 million in liquidity currently invested in the CDO business; and
  • It allows the Company to retain potential future upside in the equity in the three CDOs.

Gordon F. DuGan, Chief Executive Officer of Gramercy Capital Corp., commented, “This sale is a significant milestone in the transformation of Gramercy into a pure-play equity REIT. We are pleased to reach this agreement with CWCapital, a world-class real estate organization. With this transaction, we expect to achieve a number of important goals including an expected increase in corporate liquidity, a significant reduction in going-forward expenses, and a simplification of the balance sheet. We are very well positioned to continue our focus on creating durable, high-quality income from net lease assets throughout the United States.”

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.03 -2.90%
FB $116.73 7.20%
GOOG $691.02 -2.10%
TSLA $247.54 -1.60%
YHOO $36.59 -0.97%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs