Ready Capital Corporation Announces Completion Of Two Securitizations

Rhea-AI Summary

Ready Capital Corporation (NYSE: RC) announced the completion of two securitizations totaling $609 million in Q2 2020. The first is a $405 million commercial real estate CLO backed by 56 floating-rate loans, with 80% sold to investors at LIBOR plus 236 basis points. The second is a $204 million securitization of 228 fixed-rate commercial loans, with 85% sold at an average interest rate of 4.0%. Proceeds reduced secured borrowings by $430 million and generated $60 million in cash. Unencumbered cash rose to $225 million from $122 million in Q1 2020.

Positive

• Completion of two significant securitizations totaling $609 million.
• Reduction of secured borrowings by approximately $430 million, enhancing liquidity.
• Increase in unencumbered cash from $122 million to $225 million.

Negative

• None.

NEW YORK, July 10, 2020 /PRNewswire/ -- Ready Capital Corporation (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances and services small- to medium-sized balance commercial loans, announced today the completion of two securitizations, totaling $609 million, in the second quarter of 2020. First, a $405 million commercial real estate collateralized loan obligation secured by 56 originated floating-rate transitional loans. The Company sold 80% of the capital structure to investors with a weighted average blended interest rate of LIBOR plus 236 basis points and the most senior bond priced at LIBOR plus 215 basis points. Second, a $204 million fixed-rate securitization of 228 acquired small balance commercial real estate loans. The Company sold 85% of the capital structure to investors with a weighted average blended interest rate of 4.0% and the most senior bond priced at 3.43%. The proceeds from the securitizations were used to reduce the Company's secured borrowings by approximately $430 million and generated approximately $60 million in cash.

At June 30, 2020, the Company had unencumbered cash of approximately $225 million, an increase from the Company's March 31, 2020 unencumbered cash balance of $122 million, and secured borrowings of approximately $1.2 billion, a 25% decrease compared to the Company's March 31, 2020 secured borrowings balance.

"We are very pleased with the successful completion of two securitizations in this challenging market and believe the attractive pricing reflects the markets positive view of our small-to-medium business lending model," said Thomas Capasse, Chairman and Chief Executive Officer. "In the face of increased volatility and market instability, the closing of these securitizations is a testament to our focus on increasing liquidity and reducing mark-to-market liabilities.  These transactions enhance our liquidity to further support our opportunistic growth initiatives in the current market environment."

About Ready Capital Corporation

Ready Capital Corporation (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, finances and services small- to medium-sized balance commercial loans. The Company specializes in loans backed by commercial real estate, including agency multifamily, investor and bridge as well as U.S. Small Business Administration loans under its Section 7(a) program. Headquartered in New York, New York, the Company employs over 400 lending professionals nationwide.

Forward-Looking Statements

This press release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company 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, but are not limited to, applicable regulatory changes; the impact to the Company's business from the COVID-19 situation; volatility of the capital markets; changes in the Company's investment objectives and business strategy; the availability of financing on acceptable terms or at all; the availability, terms and deployment of capital; the availability of suitable investment opportunities; changes in the interest rates or the general economy; increased rates of default and/or decreased recovery rates on investments; changes in interest rates, interest rate spreads, the yield curve or prepayment rates; changes in prepayments of Company's assets; the degree and nature of competition, including competition for the Company's target assets; and other factors, including those set forth in the Risk Factors section of the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the Securities and Exchange Commission ("SEC"), copies of which are available on the SEC's website, -1%26h%3D498253794%26u%3Dhttp%253A%252F%252Fwww.sec.gov%252F%26a%3Dwww.sec.gov&a=www.sec.gov" rel="nofollow">www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Contact

Investor Relations
Ready Capital Corporation
212-257-4666

InvestorRelations@readycapital.com

 

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SOURCE Ready Capital Corporation

FAQ

What are the details of the securitizations completed by Ready Capital (RC) in July 2020?

Ready Capital completed two securitizations totaling $609 million: a $405 million CLO backed by floating-rate loans and a $204 million securitization of fixed-rate loans.

How much did Ready Capital (RC) reduce its secured borrowings by in Q2 2020?

Ready Capital reduced its secured borrowings by approximately $430 million in Q2 2020.

What was the increase in unencumbered cash for Ready Capital (RC) from Q1 to Q2 2020?

Ready Capital's unencumbered cash increased from $122 million in Q1 2020 to $225 million in Q2 2020.

What is the significance of the securitizations for Ready Capital (RC)?

The securitizations enhance Ready Capital's liquidity and indicate a positive market view of their small-to-medium business lending model.