Foursquare Capital IPO: Jumping into the CMBS Fray

| About: Foursquare Capital (FSQR)

Foursquare Capital (FSQR) is a new AllianceBernstein-backed REIT that plans to invest in mortgage-backed assets. Expect an IPO at some point next week.

According to the Wall Street Journal the company "joins the CMBS fray as the U.S. government steps in to lure buyers for the securities by taking on much of the risk associated with them. Values of them have tumbled the past year as that market turned south, with real-estate values slumping and occupancy rates falling."

Business Overview (from prospectus)

We are a newly-formed corporation focused on acquiring, financing and managing a portfolio of commercial mortgage-backed securities, or CMBS, residential mortgage-backed securities, or RMBS, commercial and residential mortgage loans, other real estate-related securities, various other classes of asset-backed securities, or ABS, and other financial assets. RMBS will include both securities that are not issued or guaranteed by a U.S. government agency or federally chartered corporation, or non-Agency RMBS, and securities that are so issued or guaranteed, or Agency RMBS. We refer to these as our target asset classes.

Offering: 25 million shares at $20 per share. Net proceeds of approximately $478.0 million will be used to acquire assets within the company's target asset classes in accordance with the objectives and strategies described in the prospectus.

Lead Underwriters: BofA Merrill Lynch (NYSE:BAC), Morgan Stanley (NYSE:MS), JMP Securities

Financial Highlights:

As of the date of this prospectus, we have not commenced any significant operations because we are in our organizational stage. We will not commence any significant operations until we have completed this offering and the concurrent private placement. We are not aware of any material trends or uncertainties, other than economic and credit conditions affecting mortgage loans, MBS and real estate, generally, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the acquisition of assets within our target asset classes, other than those referred to elsewhere in this prospectus.


In acquiring our portfolio of assets, we will compete with a variety of institutional investors, including AllianceBernstein, its sub-advisors and other REITs, specialty finance companies, public and private funds, commercial and investment banks, commercial finance and insurance companies and other financial institutions. Many of our competitors are substantially larger and have considerably greater financial, technical, marketing and other resources than we do.