Ares Commercial Real Estate Corporation Upsizes, Reduces the Cost and Extends the Reinvestment Period of Its Existing Securitization

Business Wire 14-Jan-2019 4:30 PM

Privately Placed $172.7 Million of Additional Investment Grade Notes and Reduced Cost of Funds by 15 Basis Points

Extended the Reinvestment Period for Two Additional Years to March 2021

Ares Commercial Real Estate Corporation (NYSE:ACRE) (the "Company" or "ACRE") announced that its subsidiary placed an additional $172.7 million of investment grade notes, reduced the costs and extended the reinvestment period in connection with its existing ACRE Commercial Mortgage 2017-FL3 securitization (the "2017-FL3 Securitization").

Together with $272.9 million of investment grade notes issued to a third-party in the initial March 2017 private placement, the 2017-FL3 Securitization now totals $445.6 million of investment grade notes held by a third-party investor. In total, these notes have a blended initial weighted average coupon of LIBOR plus 1.70%, representing a 15 basis point decrease in the cost of funds or approximately $0.02 per share of additional earnings per annum for ACRE. In addition, the reinvestment period of the 2017-FL3 Securitization was extended two additional years to March 2021.

"This transaction reduces our borrowing costs and further strengthens our balance sheet by increasing and extending our non-recourse, match-funded financing," said Jamie Henderson, President and Chief Executive Officer of ACRE.

"Our ability to privately place this transaction with a single high-quality investor significantly reduced market risk," said Tae-Sik Yoon, Chief Financial Officer of ACRE. "We were also able to deliver significant cost savings by executing this transaction using the internal relationships, structuring expertise and placement resources of Ares Management."

About Ares Commercial Real Estate Corporation

Ares Commercial Real Estate Corporation is a specialty finance company primarily engaged in originating and investing in commercial real estate loans and related investments. Through its national direct origination platform, the Company provides a broad offering of flexible and reliable financing solutions for commercial real estate owners and operators. The Company originates senior mortgage loans, as well as subordinate financings, mezzanine debt and preferred equity, with an emphasis on providing value added financing on a variety of properties located in liquid markets across the United States. Ares Commercial Real Estate Corporation elected and qualified to be taxed as a real estate investment trust and is externally managed by a subsidiary of Ares Management Corporation. (NYSE:ARES), a publicly traded, leading global alternative asset manager with approximately $125 billion of assets under management as of September 30, 2018. For more information, please visit www.arescre.com. The contents of such website are not, and should not be deemed to be, incorporated by reference herein.

Forward-Looking Statements

Statements included herein or on the webcast / conference call, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities and Exchange Act of 1934, as amended, which relate to future events or the Company's future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including the risks described from time to time in its filings with the Securities and Exchange Commission.

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