Insignia Financial Group to expand principal investment program.Insignia in·sig·ni·a also in·sig·ne n. pl. insignia or in·sig·ni·as 1. A badge of office, rank, membership, or nationality; an emblem. 2. A distinguishing sign. Financial Group announced that the company has executed agreements for $50 million of new capital through a private investment by funds affiliated with Blackacre Capital Management, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control . Insignia intends to use the proceeds to expand the company's principal investment program. The Blackacre investment consists of $12.5 million for newly issued convertible preferred stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". and a commitment to provide $37.5 million of subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". . The preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. carries an 8.5% annual dividend -- payable quarterly at Insignia's option in cash or preferred stock -- and is convertible into Insignia common stock at a price of $15.40 per share. The preferred stock has a perpetual PERPETUAL. That which is to last without limitation as to time; as, a perpetual statute, which is one without limit as to time, although not expressed to be so. term, although Insignia may call the preferred stock, at par, after June 7, 2005. This is Blackacre's second private equity investment in Insignia in two years. In February 2000, Blackacre purchased $25 million of convertible, preferred stock, which it has now exchanged for a new series of convertible preferred stock carrying a conversion price of $14 per share. All other terms of the two issues of convertible preferred stock are virtually identical. The Blackacre credit facility, which is subordinate to Insignia's senior credit facility, bears interest at an annual rate of 11.25% to 12.25%, payable quarterly, depending on the amount borrowed. Insignia may borrow in as many as three tranches Tranches A piece, portion or slice of a deal or structured financing. This portion is one of several related securities that are offered at the same time but have different risks, rewards and/or maturities. "Tranche" is the French word for "slice". over the next 18 months. The subordinated debt matures in June 2009. Insignia does not expect to borrow under the Blackacre credit facility until specific investments are identified. "We are greatly pleased by Blackacre's vote of confidence in our strategy," said Andrew L. Farkas, chairman and chief executive officer of Insignia Financial Group. "We see compelling investment opportunities in the current market environment, and the Blackacre capital provides us with additional financial resources to participate in these opportunities through our principal investment program." |
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