Newcastle Investment Corp. (NCT) announced that it has completed the sale of 100% of its interests in CDO X to the sole owner of the senior notes and another third party, in connection with the liquidation and termination of CDO X.
The company said it received $130 million for $89.75 million face amount of subordinated notes and all of its equity in CDO X. The sale and resulting deconsolidation of CDO X from the Company's balance sheet will eliminate the impact of CDO X's negative net book value and generate an approximately $200 million gain for the third quarter, Newcastle said.
A condition to the sale of its interests was the right to purchase certain collateral held by CDO X. This collateral includes eight securities with a face amount of $101 million. The company said it purchased the securities for 49.4% of par, or approximately $50 million. Following this purchase, the net proceeds of the sale were approximately $80 million.
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