Apollo Commercial Real Estate Finance (ARI) is refinancing all of its debt borrowed from the Term Asset-Backed Securities Loan Facility program through the master repurchase agreement with Wells Fargo (WFC).
The amount of borrowings from TALF totaled $250.3 million with a weighted average cost of funds of 2.8% before the decision to refinance. The commercial mortgage-backed securities also secured the borrowings with a face amount of $298.6 million.
TALF was started by the Fed in 2008 after creditors steered away from short-term funding markets, cutting down on investor demand for asset-backed securities. It was created to give loans to investors for the purchase of newly issued, highly rated ABS.
Relocating Apollo CMBS investments increased the company’s advance rate and lowered the cost of borrowing resulting in $264.4 million and weighted average cost of funds of 1.9%
“By actively managing the right side of the Company’s balance sheet, we were able to complete a transaction which generates approximately $14.0 million of investable capital and lowers the overall cost of borrowing,” said Apollo CFO Stuart Rothstein.
The two companies previously disclosed that the Wells credit facility doubled to $506 million in December from $250 million. New borrowing from the larger credit facility will bear an interest rate of 30-day LIBOR plus 1.5%.
Matthew Torres is a HousingWire reporter.