Ares Commercial Real Estate Corporation Closes $667 Million CRE CLO

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NEW YORK–(BUSINESS WIRE)–Jan 29, 2021–

Ares Commercial Real Estate Corporation (NYSE: ACRE) (the “Company” or “ACRE”) announced today that the Company, through wholly owned indirect subsidiaries, closed an approximately $667 million commercial real estate collateralized loan obligation (“CRE CLO”). The CRE CLO financed interests in 23 senior loans with an initial advance rate of 81{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} and an initial weighted average coupon of one-month LIBOR + 1.17{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c}, excluding transaction costs. The CRE CLO is match-term, non-recourse and non-mark to market financing to the Company.

The CRE CLO transaction provided the following benefits to the Company:

  • Reduced weighted average cost of funds
  • Increased non-recourse financing from 36{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} as of September 30, 2020 to 67{ac967ad544075fb2f6bcea1234f8d91da186cac15e616dc329e302b7c7326b8c} of total aggregate amounts outstanding under its financing facilities and securitizations
  • Enabled ACRE to close $146 million of new loans previously held in Ares’ real estate debt warehouse facility

These benefits are expected to be accretive to the Company’s earnings.

“We are very pleased with the execution of our fourth securitization in the current market environment, which we believe validates the strong credit quality of our loan portfolio

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