Blackstone Closes $1B CLO

The CRE collateralized loan obligation, which diversifies the company's funding sources, is the largest of its kind since the financial crisis.

moneyBlackstone Mortgage Trust Inc. has closed BXMT 2017-FL1, a $1 billion collateralized loan obligation, the largest commercial real estate CLO issued since the financial crisis of 2007–08, BXMT announced late last week.

The CLO transaction finances pari passu participation interests in 31 of BXMT’s portfolio loans at an effective advance rate of 81.75 percent with a weighted average coupon at issuance of L+1.21 percent.

Proceeds from the CLO issuance reportedly were used to repay BXMT credit facilities.

The closing of BXMT 2017 FL-1 represents a significant expansion of our credit capacity and a further diversification of our funding sources,” Steve Plavin, president and CEO of BXMT, said in a prepared statement.

The innovative structural features enabled market leading efficiency while preserving our flexibility as a balance sheet lender,” he continued. “The scale and quality of our loan portfolio uniquely positioned us to execute this highly attractive financing.

Wells Fargo Securities acted as sole structuring agent. Wells Fargo Securities, Citigroup and BofA Merrill Lynch acted as co-lead managers and joint bookrunners. Société Générale acted as co-manager.

As of press time, BXMT had not responded to Commercial Property Executive’s request for additional information.

A rating agency weighs in 

The CLO’s Class A notes are initially collateralized by a pool of 31 CRE non-controlling pari passu participation interests in 71 properties, according to a research note issued the same day by Moody’s Investor Service, which rated the Class A notes as Aaa. BXMT also issued six classes of subordinated notes.

All portfolio assets are 100 percent floating-rate obligations with a 3.59 percent weighted average spread, also according to Moody’s.