Why was a CRE CLO the right structure for that transaction compared to other financing or exit strategies?

The transaction has a 2.5 year re-investment period, allowing for assets to remain leveraged.
Allows for funding of new loans, subject to eligibility criteria.
Spreads in CRE-CLO are attractive for both issuers and investors.
Fed is cutting rates for the near future.
Allows for matching floating rate loans with floating rate liabilities.
Non MTM facility.
2.5 year non call provides stability for investors.

We always evaluate the most efficient ways to finance our business and we strive to have a balanced and diversified funding mix that includes warehouse financing, CRE CLOs, and selectively creating A-notes. When we did our last CLO, we determined that the asset composition in the pool was a good fit for CRE CLO investors and that the funding cost, along with having match-term non-recourse liabilities, was attractive relative to warehouse financing at that time.

Erik Gutman
Principal, Head of Mortgage Lending, Prime Finance Partners

Rishi Bansal,

Chief Investment Officer, BankUnited

We have been a consistent CRE CLO issuer since 2014. We have come to market in various environments. CLOs are just one of our various financing tools but an option we continue to utilize.

Peter B. Morral,

Chief Development Officer & Co-Head of Originations, Granite Point Mortgage Trust, Inc.