NorthStar Realty Finance Announces Pricing of a $531.5 Million Floating Rate CMBS Transaction

NEW YORK, Aug. 16, 2013 /PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NorthStar") announced today that NorthStar Real Estate Income Trust, Inc. ("NorthStar Income"), its first sponsored non-traded REIT, successfully priced a $531.5 million non-recourse, floating-rate CMBS transaction at a weighted average coupon of LIBOR + 2.68%. The CMBS transaction will initially be collateralized by $425.2 million of commercial real estate loans with the flexibility to contribute up to $106.3 million of additional commercial real estate loans within six months of closing. A total of $382.7 million of investment grade bonds will be issued, representing an advance rate of approximately 72%. The CMBS transaction is expected to close by the end of August.

As part of the CMBS transaction, NorthStar will contribute senior participations of originated commercial real estate loans, including an interest in the leasehold mortgage on the Milford Plaza hotel, and will retain $124.4 million of participations in these loans (the "Retained Interests"). NorthStar expects to earn a yield of approximately 13% on its Retained Interests, inclusive of fees and estimated transaction expenses.  NorthStar, together with NorthStar Income, will retain an aggregate 35% ownership interest in the Milford Plaza hotel and retail component of the hotel. 

The bonds are being offered inside the United States to (1) qualified institutional buyers within the meaning of Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") and (2) to other institutional investors that are accredited investors within the meaning of rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, and outside the United States to non-U.S. persons in reliance on Regulation S under the Securities Act. The bonds have not been registered under the Securities Act or applicable state or foreign securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the bonds.

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a diversified commercial real estate investment and asset management company that is organized as an internally managed REIT.

Safe Harbor Statement

This press release contains certain "forward‑looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or Exchange Act. Forward‑looking statements are generally identifiable by use of forward‑looking terminology such as "will," "expects" or other similar words or expressions. These statements are based on NorthStar's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; NorthStar can give no assurance that its expectations will be attained. Forward-looking statements are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying any forward-looking statements will not materialize or will vary significantly from actual results. Variations of assumptions and results may be material. Factors that could cause actual results to differ materially from NorthStar's expectations include, but are not limited to, the CMBS transaction closing on the terms anticipated, if at all, the timing of any such closing, the timing of the underlying loans being repaid, the duration of the CMBS transaction, the ability to earn the approximate 13% expected yield on the Retained Interests and the factors described in Item 1A of NorthStar's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 under the heading "Risk Factors." The foregoing list of factors is not exhaustive. All forward‑looking statements included in this press release are based upon information available to NorthStar on the date hereof and NorthStar is under no duty to update any of the forward‑looking statements after the date of this report to conform these statements to actual results.

SOURCE NorthStar Realty Finance



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