Sector developments and company hires

Ladder locks in financing
Ladder Capital has entered into a strategic financing arrangement with Koch Real Estate Investments, under which Koch will provide the company with approximately US$206.4m in senior secured financing to fund transitional and land loans. As part of the strategic financing agreement, Koch has the right to make a US$32m equity investment in the Ladder at any time prior to 31 December 2020. Ladder has also completed a private CLO with Goldman Sachs, which generated US$310.2m of gross proceeds and financed US$481.3m of loans at a 64.5% advance rate on a matched term, non-mark-to-market and non-recourse basis. Ladder will retain a 35.5% subordinate and controlling interest in the collateral, which affords the company broad discretion in managing these loans in light of Covid-19. Proceeds from the transaction were used to pay off other secured debt, including bank and FHLB financing that was subject to mark-to-market provisions. The company currently has more than US$830m of cash on hand and over US$2.6bn of unencumbered assets.

In other news…

Business split
TPG and Sixth Street Partners have agreed to become independent, unaffiliated businesses. Sixth Street was created in 2009 as TPG’s dedicated global credit and credit-related investing platform, but over the course of the partnership, each firm continued to diversify and expand with both increasingly recognising the potential for future overlap. As part of the agreement and in order to complete regulatory disaffiliation, TPG will retain a passive minority economic stake in Sixth Street at a reduced level from its current minority ownership. Until 2021, neither TPG nor Sixth Street will start new businesses in the other’s core space. Both businesses have immediate flexibility, however, to pursue investment opportunities across the capital structure as their respective fund structures permit.

Fund launch
CIM Group has launched a new closed-end interval fund dubbed CIM Real Assets & Credit Fund (CIM RACR), which will invest in a mix of institutional-quality real assets and credit instruments, including CLOs. CIM Capital IC Management serves as the investment adviser to CIM RACR, while OFS Capital Management has been selected as the fund’s investment sub-advisor for its corporate credit assets. To align the interests of CIM with investors, an affiliate of CIM will invest an aggregate of US$20m in the fund over time as it receives subscriptions from investors. ALPS Distributors is the distributor of the CIM RACR.

PTAP expanded
Ginnie Mae has introduced a new version of the existing Pass-Through Assistance Program (PTAP) for use by multifamily MBS issuers facing a temporary liquidity shortfall directly attributable to the Covid-19 national emergency. The facility allows MF MBS issuers to apply for assistance in meeting their contractual obligation to make timely and in full principal and interest payments due MF MBS holders without being held in default under the Ginnie Mae guaranty agreement. This assistance is intended to minimise disruptions in the mortgage servicing and MF MBS capital markets as borrower forbearance and loss mitigation programmes are implemented to help provide relief to renters affected by the coronavirus. Funds advanced by Ginnie Mae will bear a fixed rate of interest.