AHR News:Anthracite Capital Announces Restructuring of Unsecured Debt
On Monday June 1, 2009, 7:00 am EDT
Buzz up! Print Related:Anthracite Capital, Inc.
NEW YORK--(BUSINESS WIRE)--Anthracite Capital, Inc. (NYSE: AHR - News) (the “Company” or “Anthracite”) today announced that it has restructured a significant portion of its trust preferred securities and junior subordinated notes.
Pursuant to an exchange agreement with certain holders of $135 million in trust preferred securities and the Company’s €50 million junior subordinated notes, the Company issued $168.75 million and €62.5 million principal amount of new junior subordinated notes in exchange for those securities. The exchanges closed on May 29, 2009.
The new notes bear a fixed interest rate of 0.75% per year until the earlier of May 29, 2013 and the date on which the Company’s senior secured credit facilities with Bank of America, Deutsche Bank and Morgan Stanley have all been paid in full (the “Modification Period”). The interest rate during the Modification Period is significantly lower than the interest rates on the securities for which the new notes were exchanged. The interest rates on those securities were, as of the date of the exchanges, 7.50%, 7.73% and 7.77% per year on the trust preferred securities and EURIBOR plus 2.60% per year on the junior subordinated notes. After the Modification Period, the new notes bear interest at the same rates as the securities for which they were exchanged. The new notes are contractually senior to the Company’s remaining junior subordinated notes. The new notes otherwise generally have the same terms, including maturity dates and capital structure priority, as the securities for which they were exchanged.
The coupons that were due on April 30, 2009 on certain of the securities being exchanged were satisfied by payments at the new lower rate of 0.75% per year on the increased principal amounts.
Anthracite also paid $2.0 million to cover third-party fees and costs incurred in connection with the exchanges.
The Company estimates that these exchanges will result in cash savings of over $10 million and €2.5 million per year during the period that the lower coupons are in effect. The Company intends to use cash from these savings for general corporate purposes and to reduce indebtedness under its senior secured credit facilities.
Convertible Senior Notes Exchange
On May 27, 2009, in a privately negotiated exchange transaction with a holder of Anthracite’s 11.75% Convertible Senior Notes due 2027, the Company issued 850,000 shares of common stock in exchange for $4 million principal amount of the notes.
Interest Payments
Anthracite also announced that on May 29, 2009 it made certain interest payments due April 30, 2009 under certain of its unsecured debt that had previously been withheld, which debt was not part of the above described exchanges.
About Anthracite
Anthracite Capital, Inc. is a specialty finance company focused on investments in high yield commercial real estate loans and related securities. Anthracite is externally managed by BlackRock Financial Management, Inc., which is a subsidiary of BlackRock, Inc. (“BlackRock”) (NYSE:BLK - News), one of the largest publicly traded investment management firms in the United States with approximately $1.283 trillion in global assets under management at March 31, 2009.
BlackRock Realty Advisors, Inc., another subsidiary of BlackRock, provides real estate equity and other real estate-related products and services in a variety of strategies to meet the needs of institutional investors.
