Starwood Property Trust Inc. reports that it participated in a recently completed commercial mortgage loan securitization led by Deutsche Bank Securities Inc., contributing four first-mortgage loans with an aggregate principal balance of $154.4 million.
Starwood uses the securitization market to provide nonrecourse match term funding when it retains related subordinate debt, and this securitization provided the company with an effective cost of funds of approximately 5.1%.
Three of the loans contributed to the securitization, which has an aggregate principal balance of $130.4 million, have a total of $99.8 million of subordinate notes or mezzanine loans that Starwood retained. The subordinate debt investments retained by the company are secured by a portfolio of hotels, an assisted-living facility and an office building and have a weighted average remaining maturity of 55 months and a weighted average last dollar exposure loan-to-value ratio of 62%.
Upon the settlement of this securitization transaction, Starwood's remaining portfolio of loans that are targeted for securitization or sale to a third party will be approximately $123 million.
