Capital Trust announces $466m CDO.Capital Trust, Inc. announced a proposed offering of approximately $466 million aggregate principal amount of non-recourse collateralized debt obligations Collateralized Debt Obligation (CDO) A general inclusive term which covers Collateralized Bond Obligations, Collateralized Loan Obligations, and Collateralized Mortgage Obligations, . The notes evidencing the CDOs will be issued by two subsidiaries under a common indenture and secured by a $490 million portfolio of commercial mortgage-backed securities Commercial mortgage-backed securities (CMBS) are a type of bond commonly issued in American security markets. They are a type of Mortgage-backed security which are backed by mortgages on commercial rather than residential real estate. , and other commercial real estate debt which will be sold to one of the subsidiaries by Capital Trust upon the closing of the offering. The collateral is comprised of $186 million of assets that Capital Trust already owns and $304 million of CMBS CMBS See: Commercial Mortgage Backed Securities that Capital Trust has agreed to purchase in connection with the offering. Capital Trust expects to acquire all of the Issuer's below investment grade rated Notes and preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. with an aggregate face value of $59 million. Capital Trust expects to account for the transaction as a financing and record on its balance sheet the underlying collateral as assets and the Notes sold as liabilities. Capital's subsidiary, CT Investment Management Co. LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , will serve as the collateral manager for the transaction. The offering will be made in a private placement transaction. |
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