Colony Capital, Colony Financial Provide $206M Secured Loan

Investment vehicles managed by Colony Capital LLC and Colony Financial Inc., a newly formed real estate finance company focused on commercial mortgage loans, has originated a $206 million maximum principal senior secured term loan facility to Newport Beach, Calif.-headquartered William Lyon Homes.

Colony Financial will fund $50 million of this loan facility alongside $156 million to be funded by the other participating investment funds managed by Colony Capital.Â

‘With more than 50 years of experience in the homebuilding industry, William Lyon Homes has built an envious operating record through multiple housing cycles,’ says Thomas J. Barrack Jr., founder, chair and CEO of Colony Capital. ‘We believe in the long-term fundamentals of the industry and are encouraged by the recent improvement in housing fundamentals."

William Lyon Homes intends to use the proceeds from this facility to enhance liquidity, repurchase debt and restructure its balance sheet, as well as for opportunistic land acquisitions and general corporate purposes, the company says.

‘We are pleased to have the opportunity to execute such a significant high-yielding, quality investment just three weeks after our initial public offering,’ says Richard Saltzman, CEO and president of Colony Financial. ‘The attractive yield profile, high cash pay feature and first-lien security within the capital structure are what make this transaction attractive to Colony Financial. We are being selective in our asset allocation, focused on building the optimal portfolio for the long term.’

SOURCE: Colony Financial


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