Hedge Fund Given Control For Buying Low-Rated CMBS

Aug 19 2010 | 2:18pm ET

Hedge fund H/2 Capital Partners will be calling the shots on a portfolio of commercial mortgage-backed securities after agreeing to buy the riskiest tranche of the offering.

The deal with Stamford, Conn.-based H/2 is part of a $1 billion CMBS sale, the year’s largest. H/2 is buying the bottom $50 million of the securitization, and in exchange will have primary authority over the troubled loans, Bloomberg News reports.

By contrast, Goldman Sachs and Citigroup gave those rights to buyers of the highest-rated tranches in their $788.5 million debt sale earlier this month.

H/2 will get a 14% yield on the 10-year investment, in the unlikely scenario that the loans suffer no losses.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Saxby: Not All EBITDA Is Created Equal

Nov 30 2017 | 8:02pm ET

Record levels of dry powder are driving competition among private equity firms to...