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NorthStar Realty Finance Corp. Announces It Intends To Commence An Exchange Offer For NorthStar Realty Finance Limited Partnership's 7.50% Exchangeable Senior Notes

NEW YORK, Feb. 27, 2014 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) (the "Company") announced today that it plans to commence an exchange offer for the outstanding 7.50% Exchangeable Senior Notes due 2031 (the "7.50% Exchangeable Notes") of NorthStar Realty Finance Limited Partnership, the Company's operating partnership.

The Company intends to offer holders of the 7.50% Exchangeable Notes the opportunity to exchange the 7.50% Exchangeable Notes for newly issued 3.00% Senior Notes due 2014 of the Company that will mature on September 30, 2014 (the "New Notes").  The New Notes will not reference, and may not be repaid in, shares of common stock of NorthStar Asset Management Group Inc. ("NSAM").  As previously announced, the Company plans to spin-off its asset management business through a distribution of NSAM common stock to its stockholders.

Subject to the anticipated terms and conditions of the proposed exchange offer, holders of the 7.50% Exchange Notes who validly tender and do not validly withdraw their 7.50% Exchange Notes prior to 11:59 p.m. on March 27, 2014, the expected expiration date of the proposed exchange offer, will receive, for each $1,000 principal amount of 7.50% Exchange Notes accepted for exchange, New Notes in a principal amount equal to 102% of the product of (1) the conversion ratio of the 7.50% Exchangeable Notes in effect on the expiration date, multiplied by (2) the arithmetic average of the daily volume-weighted average prices of the Company's common stock on the New York Stock Exchange over a 15 consecutive trading day period beginning on March 5, 2014 and ending on March 25, 2014. 

Regardless of participation in the proposed exchange offer, holders of record of the 7.50% Exchangeable Notes on March 1, 2014 will receive the interest payment of $37.50 per note on March 17, 2014, unless they have previously exchanged the 7.50% Exchangeable Notes in accordance with their terms.  The Company will not receive any proceeds as a result of the proposed exchange offer. 

The New Notes may be redeemed at the Company's option for cash at any time prior to maturity.  At maturity, holders of the New Notes will receive, at the Company's election, in addition to the interest payment, either (1) cash or (2) shares of the Company's common stock.  If the Company elects to deliver shares of its common stock at maturity, the Company anticipates that the number of shares of common stock deliverable will be determined by reference to the daily volume-weighted average prices of the Company's common stock on the New York Stock Exchange during a 20 consecutive trading day period beginning 23 scheduled trading days prior to the anticipated maturity date. 

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