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Zais Financial's Louisiana Mortgage Unit to Experience Increased Delinquencies Due to Flooding.


19 August 2016 - New Jersey, US-based mortgage REITZais Financial Corp.'s (NYSE: ZFC) Baton Rouge Louisiana, US-based mortgage banking subsidiary, GMFS, is executing its business continuity plan in light of the severe flooding which has occurred in southern Louisiana.

In particular, GMFS remains fully operational; its systems fully functional and employees are reporting to work.

GMFS continues to close and sell loans, although at a reduced volume. While the situation continues to evolve and GMFS is not yet in a position to quantify the impact of the flooding on its current business and financial results, GMFS anticipates that it will experience higher delinquencies and a decrease in servicing income while its impacted customers recover.

In April, Zais Financial entered into a definitive merger agreement under which the company will combine with privately held commercial mortgage REIT Sutherland Asset Management Corp.

In the transactions described in the merger agreement, ZFC stockholders will continue to be stockholders of the surviving corporation and will be eligible to receive cash aggregating approximately USD 64m in a tender offer to be made by the company following stockholder approval of the transaction.

SAM stockholders will receive newly issued ZFC shares, and holders of operating partnership units of SAM will receive operating partnership units in the surviving company.

Following the merger, the combined entity will be renamed Sutherland Asset Management Corp., and its shares will continue to be listed on the New York Stock Exchange under the symbol SLD.

SAM will be externally managed, by Waterfall Asset Management, LLC, SAM's current external manager.

On 19 August, the company said it had filed a registration statement on form S-4 with the Securities and Exchange Commission that included a preliminary joint proxy statement/prospectus, and will file other relevant documents concerning the mergers.

Country: USA

Sector: Construction/Real Estate

Target: Zais Financial Corp

Buyer: Sutherland Asset Management Corp


Deal size in USD: 64m

Type: LBO

Financing: Cash

Status: Agreed

Buyer advisor: Bank of America Merrill Lynch , Sidley Austin LLP ,

Comment: Zais expects that its Louisiana mortgage unit will experience increased delinquencies due to the recent flooding in the state.

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Publication:M & A Navigator
Geographic Code:1U7LA
Date:Aug 19, 2016
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