M360 Advisors Completes Second Commercial Real Estate CLO, Closing at $360 Million
LADERA RANCH, Calif. – (September 5, 2019) – M360 Advisors, LLC (“M360 Advisors” or “M360”) today announced the closing of a $360 million collateralized loan obligation transaction ("CLO") issued by M360 2019-CRE2, Ltd. (the “Issuer”) and M360 2019-CRE2, LLC (together with the Issuer, the “Co-Issuers”). The notes were rated by Moody's Investors Service and DBRS.
The Co-Issuers are subsidiaries of MCREIF SubREIT, LLC ("M360 REIT"), a private REIT managed by M360 Advisors. M360 Advisors will serve as the “Collateral Manager” for this transaction. M360 Advisors is an investment management company and wholly-owned subsidiary of Money360, Inc., a technology-enabled direct lender specializing in commercial real estate (CRE) loans, with over $1.4 billion in loans originated since inception. This is M360 Advisors’ second commercial real estate CLO transaction.
The Co-Issuers offered and sold investment-grade-rated senior notes to institutional investors via a private placement. Subordinated notes (together with the senior notes, the "Notes") and preferred shares of the Issuer were acquired and will be held by a subsidiary of M360 REIT. The Notes are collateralized by assets initially consisting of 32 commercial real estate loans that include whole loans and senior participations secured by 32 properties. The transaction includes an 18-month reinvestment period during which the Issuer through the Collateral Manager may use loan asset proceeds to purchase additional eligible loan assets. The initial portfolio consists of floating rate obligations with a weighted average coupon margin of approximately 4.93% over LIBOR.
“We see a substantial pipeline of attractive commercial real estate lending opportunities in the market and pursuing this CRE CLO offering allows us greater flexibility to provide those loans,” said Evan Gentry, M360 Founder and CEO. “The closing of our second successful CRE CLO signifies another milestone achievement for the future of our business.”
M360 Advisors manages commercial mortgage debt portfolios of approximately $800 million as of July 31, 2019.
“This transaction will allow us to expand our funding to diversify our existing portfolio, while maintaining the stringent level of underwriting practices that our investors trust us to uphold,” said Dan Vetter, M360 Co-Founder and President.
J.P. Morgan Securities LLC acted as sole structuring agent, lead manager and bookrunner. Waterford Capital, Inc. acted as co-manager.
About M360 Advisors
M360 Advisors is a U.S.-based investment management company that manages alternative investment vehicles for institutional and accredited retail investors. M360 Advisors’ fund offerings are designed to provide a short-duration, high-yield, low-volatility alternative to traditional fixed income investments, while also providing significant collateral protection and reasonable liquidity. Fund offerings are designed for international tax efficiency and have attracted institutional investors throughout the world. M360 Advisors benefits from proprietary deal flow sourced by its affiliate, Money360, Inc., a vertically-integrated direct lender that originates commercial real estate loans collateralized by office, industrial, multifamily, hospitality and retail property types.