(To read more on the debt and equity markets, click here.)

NEW YORK CITY-Gramercy Capital Corp. has closed on Gramercy Real Estate CDO 2005-1, a $1-billion commercial debt obligation. The securities consist of $810.5 million of investment-grade notes, $84.5 million of non-investment grade notes and $105 million of preferred shares. Substantially all of the debt investments originated or acquired by Gramercy since its initial public offering in August 2004 were contributed to the CDO.

"This CDO allows Gramercy to match fund its assets and liabilities, will enhance Gramercy's ability to directly originate a wider variety of investments by reducing our cost of funds, and will allow us to continue to focus only on those investments that offer the best risk-adjusted returns," says Hugh F. Hall, Gramercy's COO. The company used the majority of proceeds to repay substantially all of its outstanding debt in its warehouse credit facilities. The rest will be used to fund additional investments.

Locally based Gramercy specializes in the direct origination and acquisition of first mortgage loans, subordinate mortgage participations, mezzanine loans, preferred equity investments and credit tenant net lease investments involving commercial properties. SL Green created Gramercy to continue its structured finance business as a separate public company. In April, Gramercy obtained an increased commitment of $150 million under an existing master repurchase agreement. The financing, provided by Wachovia Bank and certain of its affiliates, goes from $350 million to $500 million. The modifications increased the company's total debt capacity from $625 million to $725 million.