Seeking Alpha

More than $300M of investments in Q1 for Resource Capital

  • Resource Capital (RSO +0.4%) originated five new commercial loans totaling about $116.8M in Q1, and funded $3.7M on existing commitments. Seven loans are currently in process totaling $108.2M, including three expected to close within the next two weeks. RSO has applications in hand for another six new loans totaling $240.2M and a pipeline representing more than $650M of potential investments. The company also purchased $40.8M par value of CMBS during the quarter.
  • Among commercial finance deals, RSO invested $37.8M in European CLO equity, expecting an IRR of 21%.
  • Press release
Comments (7)
  • COBeeMan
    , contributor
    Comments (2099) | Send Message
     
    Have been buying around $5.50! The next earnings report is likely to be quite positive!
    11 Apr 2014, 11:42 AM Reply Like
  • halina
    , contributor
    Comments (2) | Send Message
     
    I'd like to know why RSO's stock price has been trending downwards now for over a year. I know in the bigger scope of things it may not matter, but I'm just wondering why a stock that was riding high at over $6 back in 2010 and 2011 is now consistently depreciating.
    11 Apr 2014, 11:59 AM Reply Like
  • incredible
    , contributor
    Comments (5) | Send Message
     
    Most all reits have been on the downside for awhile since Uncle Sam started sticking it's fingers in on it
    11 Apr 2014, 12:15 PM Reply Like
  • ca7711
    , contributor
    Comments (546) | Send Message
     
    Halina.
    AFFO of .12 cents last quarter and .16 cents the quarter before due to premature redemption of the legacy CLOs they had on their books. Their quarterly distribution payout is .20 cents. Bottom line, they had to sell some of their equity holdings to offset some of this gap in AFFO/Distribution. Looks like they are investing all that excess cash at a decent rate this quarter but you have to wonder if they are being forced into accelerated investment (thus increasing credit risks) to fund their distributions. There is also something to be said for overall market sentiment currently. I personally sold out at 5.82 after last quarters CC because of the continued drop in AFFO and to strategically reposition my port for potential downside. best of luck and I don't think RSO is a bad company, its just in transition. RSO performance will be tied to overall market sentiment and their transition to more commercial lending.
    11 Apr 2014, 12:11 PM Reply Like
  • Pablomike
    , contributor
    Comments (3095) | Send Message
     
    Considering they have held $200M or more in cash for several quarters I'd like to think they have been very careful with their decisions. I've been patiently waiting for them to find the right opportunities. Agree with WP below; AFFO should be above payout from here on. Doubled down at $5.50.
    12 Apr 2014, 04:04 PM Reply Like
  • William Packer
    , contributor
    Comments (792) | Send Message
     
    ffo was 0.14 not 0.12 last quarter.. caused by clo prepayment. not a big deal.. money has been invested again in q1 and FFO for q2 likely 0.20 or 0.22 a share.
    11 Apr 2014, 02:31 PM Reply Like
  • ca7711
    , contributor
    Comments (546) | Send Message
     
    William, thanks for the clarification
    11 Apr 2014, 03:00 PM Reply Like
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