Late last month, Santa Monica, Calif.-based Colony Financial Inc. participated in the origination of $400 million of mezzanine debt, the company reported in a summary of its second-quarter business activities. Colony retains a pro rata share of $60 million of the total $400 million of mezzanine debt.
The debt consists of four $100 million mezzanine loan tranches and is part of a $1.4 billion financing used to partially fund a financial sponsor's acquisition of 107 assets out of Centro Properties Group's 593-asset retail portfolio.
The company's participation represents a 20% interest in the most senior and two most junior tranches of the debt. Colony's combined loan investment is scheduled to mature in July 2016, bears interest at a weighted-average rate of 9.75% per annum and has an expected yield-to-maturity of approximately 10%.
The loan collateral includes pledges of equity interests in 107 primarily grocery-anchored shopping centers located in 27 states, collectively representing more than 16 million square feet.
