Capital Trust announces closing of fourth CDO.

Capital Trust, Inc. announced the closing of CT CDO IV, a $489 million collateralized debt obligation ("CDO") financing that represents the company's fourth CDO issuance.

The company issued $489 million of securities comprised of $484 million of secured notes and $5 million of preferred shares. Capital Trust retained all of the below investment grade securities and the preferred shares in the CDO issuer for a total investment of $60 million. The securities rated BBB- and above, totaling $429 million, were privately placed and sold to third-party investors. Capital Trust's wholly owned asset management subsidiary, CT Investment Management Co., LLC, is the collateral manager for the CDO.

Collateral for CT CDO IV consists of a $489 million portfolio of commercial mortgage-backed securities and other commercial real estate debt with a Fitch weighted average rating factor of BBB-/BB+.

Approximately 62% ($303 million) of the collateral was purchased at closing with the balance ($186 million) coming from Capital Trust's existing portfolio. Prior to the CDO, Capital Trust had allocated $47 million of equity to its $186 million of contributed collateral. The non-reinvesting, static pool CDO was fully ramped at closing. Of the $429 million of notes sold, $413 million bear interest at floating rates and $17 million at fixed rates. The CT CDO IV structure incorporates a pro rata pay and an interest rate swap feature that allow the Company to efficiently finance a combination of fixed and floating rate collateral while maintaining term and index matching.

The non-mark-to-market, non-recourse notes sold represent a financing with a cash cost of 5.52% for the fixed rate notes and LIBOR plus 0.43% for the floating rate notes. CT CDO IV is rated by Fitch Ratings and Standard & Poor's.

Capital Trust will account for the transaction as a financing, consolidating all of the collateral onto its balance sheet as assets and all the CDO notes sold as liabilities.