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Gramercy Closes $1B CDO

NEW YORK CITY-Gramercy Capital closes a $1-billion commercial real estate collateralized debt obligation. The financing company plans to put proceeds toward debt payment and additional investments.

By Barbara Jarvie | Updated on July 14, 2005

(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.

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