RAIT Financial Trust (RAS) announced that ARS VI Investor I, LLC, an affiliate of Almanac Realty Investors LLC, has committed to invest $100 million in RAIT.
The capital will be utilized to fund RAIT's expanding loan origination and investment activities, including CMBS and bridge lending. The first $20 million of this commitment is expected to be funded on October 17, 2012.
In connection with the funding, RAIT's Board of Trustees will appoint Andrew Silberstein, a partner of Almanac, to join the Board.
The company said that $100 million investment to be drawn at RAIT's discretion, subject to customary draw down conditions, from time to time over the next two years for a combination of RAIT securities including the following:
4.0 million Series D Cumulative Redeemable Preferred Shares bearing a cash coupon rate initially of 7.5% and increasing at regular intervals thereafter. Ranks on parity with RAIT's existing outstanding preferred shares. Liquidation preference equal to $26.25 per share for five years and $25.00 per share thereafter.
The Series D Preferred Shares will be issued in combination with warrants exercisable for, in the aggregate, up to 9.93 million of RAIT's common shares for an exercise price of $6.00 per Common Share, in each case subject to adjustment.
The Series D Preferred Shares will also be issued in combination with Common Shares appreciation rights or "SARs" with respect to, in the aggregate, up to 6.74 million Common Shares for an exercise price of $6.00 per Common Share, in each case subject to adjustment.
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