NEW YORK, Aug. 3, 2020 /PRNewswire/ -- Exantas Capital
Corp. (NYSE: XAN) (the "Company" or "Exantas")
announced today that ACRES Capital Corp. through its subsidiary,
ACRES Capital, LLC (collectively, "ACRES"), has acquired the
Company's Management Agreement from an affiliate of C-III Capital
Partners ("C-III"). In addition, the Company has
entered into separate definitive agreements with Massachusetts
Mutual Life Insurance Company ("MassMutual") and a fund
managed by Oaktree Capital Management, L.P. ("Oaktree") for
new capital commitments aggregating up to $375 million. The Company expects the new
financing to provide ample liquidity to meet current financing
requirements, and for new investments. As a result of the
transaction, Exantas's new manager, ACRES, has assumed management
responsibility effective immediately and will begin to implement
the Company's business plan to preserve and grow book value and
earnings.
"Exantas has assembled a high quality portfolio and strong
market position that we intend to continue to grow into a market
leader in commercial real estate lending," said Andrew Fentress, Co-Founder of ACRES and
newly appointed Chairman of the Board of Exantas. "The
financings provided by MassMutual and Oaktree are a testament to
the strength and quality of Exantas's business and portfolio and we
expect the financings will allow us to navigate the evolving market
and execute on our objective to deliver long-term value to
shareholders. We look forward to discussing our plans on the
second quarter earnings call."
ACRES is a dedicated middle market commercial real estate lender
led by a management team with extensive public company and mortgage
REIT operating experience. ACRES has a robust asset management and
origination platform along with a proven ability to source
and maintain sponsor relationships, which will benefit Exantas as
it restarts its origination efforts.
The new financing agreements materially increase the liquidity
profile of Exantas and are structured with flexible terms that
create optionality, allowing the Company to take a proactive
approach to asset management to drive value from the existing
portfolio as well as opportunistically enhance its balance
sheet.
Transaction Details
Management Transition
In connection with the transactions, ACRES and the Company
entered into an Amended and Restated Management Agreement.
Andrew Fentress and Mark Fogel, Co-Founders of ACRES, will serve as
Chairman of the Board, and as President, CEO and Board member, of
Exantas, respectively. Andrew
Farkas and Jeffrey P. Cohen
have resigned from the Board of Directors with immediate
effect. ACRES has added 18 professionals from the former
C-III team to its staff, including David
Bryant, current Chief Financial Officer of Exantas, who will
remain with the Company in his current role to maintain operational
continuity.
Senior Secured Financing Facility
The Company entered into a $250
million seven-year senior secured financing facility with
MassMutual that can be utilized to fully repay Exantas's warehouse
and repurchase facilities, thereby reducing the potential for any
future margin calls under such facilities. The facility has
an advance rate of 55% and an interest rate of 5.75%.
Flexible operating terms include a two-year revolving period
followed by a five-year term, with no prepayment penalty after year
one.
Unsecured Notes
The Company entered into agreements with Oaktree and MassMutual
to provide a commitment of up to $125
million in the form of seven-year unsecured notes. The
unsecured notes have a cash interest rate of 8.75% and a PIK
interest rate of 3.25%, totaling an annual interest rate of 12.00%.
The Company issued $50 million
of unsecured notes to Oaktree and MassMutual at closing and may
draw up to an additional $75 million
over the next 18 months at Exantas's option. The unsecured
notes provide balance sheet flexibility and enhance Exantas's
liquidity position. In connection with the $50 million unsecured notes issued at closing,
Exantas also issued to Oaktree and MassMutual warrants to purchase
an aggregate of 1.4 million shares of common stock at an exercise
price of $0.01 per share. In
connection with the issuance of the remaining $75 million of additional unsecured notes, the
Company will issue Oaktree and MassMutual additional warrants to
purchase an aggregate of 2.1 million additional shares ratably as
commitments are funded.
JMP Securities served as Exantas's financial adviser and
Morrison & Foerster LLP served as Exantas's legal
advisor. Ledgewood, P.C. served as special counsel to
Exantas. Raymond James served as ACRES' financial
adviser and Hunton Andrews Kurth LLP and Cadwalader, Wickersham
& Taft LLP, served as ACRES' legal advisors. Clifford
Chance LLP served as C-III Capital Partners' legal advisor.
About Exantas Capital Corp.
Exantas Capital Corp. is a real estate investment trust that is
primarily focused on originating, holding and managing commercial
real estate mortgage loans and other commercial real estate-related
debt investments. The Company is externally managed by ACRES
Capital, LLC, a subsidiary of ACRES Capital Corp. For more
information, please visit the Company's website at www.exantas.com
or contact investor relations at IR@exantas.com or
ocouture@acrescap.com.
About ACRES
ACRES is a private commercial real estate lender exclusively
dedicated to nationwide middle market CRE lending with a focus on
multifamily, student housing, hospitality, office and independent
senior living in top US markets. As of June 30, 2020, ACRES manages and services
$1.1 billion of loans on behalf of
over 80 institutional investors from around the world.
About MassMutual
MassMutual is a leading mutual life insurance company that is
run for the benefit of its members and participating policyowners.
MassMutual offers a wide range of financial products and services,
including life insurance, disability income insurance, long term
care insurance, annuities, retirement plans and other employee
benefits. For more information, visit www.massmutual.com.
About Oaktree
Oaktree is a leader among global investment managers
specializing in alternative investments, with $113 billion in assets under management as of
March 31, 2020. The firm emphasizes
an opportunistic, value-oriented and risk-controlled approach to
investments in credit, private equity, real assets and listed
equities. The firm has over 950 employees and offices in 19 cities
worldwide. For additional information, please visit Oaktree's
website at http://www.oaktreecapital.com/.
Forward-Looking Statements
This press release contains certain 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. Such forward-looking statements can generally be
identified by our use of forward-looking terminology such as "may,"
"trend," "will," "continue," "expect," "intend," "anticipate,"
"estimate," "believe," "look forward" or other similar words or
terms. Because such statements include risks, uncertainties and
contingencies, actual results may differ materially from the
expectations, intentions, beliefs, plans or predictions of the
future expressed or implied by such forward-looking statements.
Factors that can affect future results are discussed in the
documents filed by the Company from time to time with the
Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any forward-looking statement to
reflect new or changing information or events after the date hereof
or to reflect the occurrence of unanticipated events, except as may
be required by law.
View original
content:http://www.prnewswire.com/news-releases/exantas-capital-corp-announces-acquisition-of-management-contract-from-c-iii-capital-partners-by-acres-capital-corp-and-375-million-financing-from-massmutual-and-oaktree-capital-management-301104600.html
SOURCE Exantas Capital Corp.
