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Resource Capital liquidates commercial real estate CDO vehicle

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Resource Capital liquidates commercial real estate CDO vehicle

ResourceCapital Corp. on April 25 called and liquidated its investment inRREF CDO 2006-1 and received collateral with a net realizable value of about$66.3 million.

RREF CDO 2006-1 was the company's first commercial realestate CDO vehicle, which closed Aug. 10, 2006, and was composed of $345.0million of assets at closing.

Resource Capital received $49.0 million in remainingcollateral, at par, in exchange for its remaining interest after paying off theCDO debt. Further, RREF 2006-1 held an interest of $17.25 million,at par, in certain notes of RREF CDO 2007-1 and, as a result, the liquidationincreased the company's net investment in RREF 2007-1.

Resource Capital had deferred adjusted funds from operationsof $21.4 million as of March 31, representing cash gains on extinguishment ofdebt. The cash gains will be recognized over subsequent periods as adjustedfunds from operations as the company receives cash above its cost basis in therepurchased debt, according to a news release.