GREENWICH, Conn., Aug. 17 /PRNewswire-FirstCall/ -- Starwood Property Trust (NYSE: STWD) today announced its participation in a recently completed commercial mortgage securitization which generated non-recourse match funded financing for the Company with an effective cost of funds of approximately 3.5%. The Company separated five mortgage loans with an aggregate face value of $178 million into senior and junior loans. It contributed the five senior loans, comprised of either a senior A note or senior participation (the "Contributed Loans"), with a face value of approximately $84 million to the securitization and received approximately $92 million in proceeds, while retaining $94 million of junior interests. The Contributed Loans are secured by office, retail and industrial properties and have remaining maturities between four and seven years. Goldman, Sachs & Co., Citigroup Global Markets Inc. and Wells Fargo Securities, LLC acted as initial purchasers.
Each of the five Contributed Loans was either originated or acquired by the Company as part of a first mortgage loan. In connection with the securitization, two of the first mortgage loans were each split by the Company into a senior participation and a junior participation and three of the first mortgage loans had each been previously split into A notes, B notes and C notes. In the aggregate, the Company retained junior interests to each of the Contributed Loans with a current face value of approximately $94 million and a weighted average levered return of approximately 16%. This increases the levered return on the Company's portfolio of target investments in excess of 12%.
"We are pleased to be an early participant in the new CMBS market," said Leo Huang, Head of Real Estate Fixed Income for Starwood Capital Group, the Company's external manager. "Our retained investments will generate returns in excess of 16% on a non-recourse, match funded basis. We expect the CMBS securitization market, together with our recently closed financing facility, to offer the Company attractive financing that will support the ongoing execution of our strategy and allow us to deliver safe, attractive returns to our shareholders."
About Starwood Property Trust, Inc.
Starwood Property Trust, Inc. (NYSE: STWD) is a commercial real estate finance company that is focused primarily on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate-related debt investments, and has originated or acquired over $1.3 billion of loans since its IPO in August 2009. Starwood Property Trust, Inc. is externally managed and advised by SPT Management, LLC, an affiliate of Starwood Capital Group, and intends to elect to be taxed as a real estate investment trust for U.S. federal income tax purposes.
Forward Looking Statements
Statements in this press release which are not historical fact may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although Starwood Property Trust, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company's expectations include completion of pending investments, continued ability to acquire additional investments, competition within the finance and real estate industries, economic conditions, and other risks detailed from time to time in the Company's reports filed with the SEC.
SOURCE Starwood Property Trust, Inc.
Contact: Andrew J. Sossen of Starwood Property Trust, Inc., +1-203-422-8100, investorrelations@stwdreit.com