RMR Mortgage Trust Enters into a Master Repurchase Facility with UBS AG

Rhea-AI Summary

RMR Mortgage Trust (Nasdaq: RMRM) has announced a master repurchase facility agreement with UBS AG, aimed at enhancing its commercial mortgage loan investments. This facility, intended for strategic growth, allows RMRM to leverage its equity of $192 million by advancing up to 75% of loan amounts. The facility's three-year term involves floating interest rates based on LIBOR plus a premium. CFO Doug Lanois expressed optimism about the arrangement, highlighting its potential to support RMRM's growth strategy.

Positive

• Establishment of a master repurchase facility enhances RMRM's investment capacity.
• Allows leveraging of $192 million equity, potentially increasing loan portfolio growth.

Negative

• Advancements are contingent on meeting financial covenants, posing risk.
• Actual costs may exceed LIBOR plus premium, raising financial liabilities.
• Growth assumptions depend on market conditions and competitive landscape.

RMR Mortgage Trust (Nasdaq: RMRM) today announced that it has entered into an agreement for a master repurchase facility with UBS AG, which it may use to leverage its commercial mortgage loan investments. While there is no maximum facility amount, RMRM expects the use of this facility will not exceed its equity amount, which is currently $192 million. The facility has a three-year term and permits advancement of up to 75% of a whole loan investment amount. Interest on advancements under the facility will be calculated at floating rates based on LIBOR plus a premium.

Doug Lanois, Chief Financial Officer and Treasurer, made the following statement:

“We are pleased to announce our financial arrangement with UBS and to establish this repurchase facility, which is designed to provide RMRM with substantial capacity to execute on its strategy as a commercial mortgage REIT and support continued growth of its loan portfolio.”

About RMR Mortgage Trust (Nasdaq: RMRM)

RMR Mortgage Trust (Nasdaq: RMRM) is a real estate finance company that originates and invests in first mortgage loans secured by middle market and transitional commercial real estate. RMRM is managed by an affiliate of The RMR Group Inc. (Nasdaq: RMR). Substantially all of RMR’s business is conducted by its majority owned subsidiary, The RMR Group LLC, which is an alternative asset management company with more than $32 billion in assets under management and more than 30 years of institutional experience in buying, selling, financing and operating commercial real estate. For more information about RMRM, please visit www.rmrmortgagetrust.com.

WARNING CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever RMRM uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, RMRM is making forward-looking statements. These forward-looking statements are based upon RMRM’s present intent, beliefs and expectations, but forward-looking statements are not guaranteed to occur and may not occur for numerous reasons, some of which are beyond RMRM’s control. Actual results may differ materially from those contained in or implied by RMRM’s forward looking statements as a result of various factors. Forward looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond RMRM’s control. For example:

• Advancements under the repurchase facility is subject to RMRM’s satisfying certain financial covenants and other repurchase facility conditions that RMRM may be unable to satisfy. In addition, actual costs under the repurchase facility will be higher than LIBOR plus a premium because of fees and expenses associated with the repurchase facility.
• RMRM’s equity is currently $192 million. However, that amount will change from time-to-time and may increase or decrease. RMRM expects that the size of its repurchase facility may similarly change as RMRM’s equity amount changes.
• Statements about RMRM’s continued growth of its loan portfolio may imply that RMRM will successfully grow its loan portfolio and that it will benefit as a result. However, RMRM’s ability to make additional loans is subject to various risks, including competition, demand for loans of the type RMRM provides, RMRM’s ability to successfully negotiate and enter into loan agreements and other matters. In addition, any growth of its loan portfolio may not benefit RMRM if, for example, RMRM does not realize the returns it expects from that growth.

For these and other reasons, investors should not place undue reliance upon RMRM’s forward-looking statements. Except as required by law, RMRM does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210219005310/en/

FAQ

What is the purpose of the master repurchase facility for RMR Mortgage Trust (RMRM)?

The facility aims to enhance RMRM's capacity for commercial mortgage loan investments.

What is the maximum leverage RMRM can utilize under the UBS master repurchase facility?

RMRM can leverage up to 75% of a whole loan investment amount.

How long is the term of the master repurchase facility entered by RMRM?

The master repurchase facility has a term of three years.

What is RMRM's current equity amount as stated in the press release?

RMRM's current equity amount is $192 million.

What risks are associated with RMRM's master repurchase facility?

Risks include failure to meet financial covenants and rising costs due to additional fees.