NEW YORK, Aug. 16, 2013 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar") announced today that NorthStar Real Estate Income Trust, Inc. ("NorthStar Income"), its first sponsored non-traded REIT, successfully priced a $531.5 million non-recourse, floating-rate CMBS transaction at a weighted average coupon of LIBOR + 2.68%. The CMBS transaction will initially be collateralized by $425.2 million of commercial real estate loans with the flexibility to contribute up to $106.3 million of additional commercial real estate loans within six months of closing. A total of $382.7 million of investment grade bonds will be issued, representing an advance rate of approximately 72%. The CMBS transaction is expected to close by the end of August.
As part of the CMBS transaction, NorthStar will contribute senior participations of originated commercial real estate loans, including an interest in the leasehold mortgage on the Milford Plaza hotel, and will retain $124.4 million of participations in these loans (the "Retained Interests"). NorthStar expects to earn a yield of approximately 13% on its Retained Interests, inclusive of fees and estimated transaction expenses. NorthStar, together with NorthStar Income, will retain an aggregate 35% ownership interest in the Milford Plaza hotel and retail component of the hotel.
The bonds are being offered inside the United States to (1) qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and (2) to other institutional investors that are accredited investors within the meaning of rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. The bonds have not been registered under the Securities Act or applicable state or foreign securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the bonds.
About NorthStar Realty Finance Corp.NorthStar Realty Finance Corp. is a diversified commercial real estate investment and asset management company that is organized as an internally managed REIT.