Chastain Announces Asset Sales
ATLANTA--(BUSINESS WIRE)--March 31, 1999--Chastain Capital Corporation (Nasdaq/NM:CHAS) announced the sale of a significant portion of its commercial mortgage-backed securities (CMBS) portfolio and one of its real estate investments for $51.6 million.
Proceeds from the sales were used to repay all of Chastain's borrowings from Morgan Guaranty Trust, Merrill Lynch Mortgage Capital and Deutsche Bank Securities and terminate these credit facilities. The CMBS sales resulted in realized losses of $14.2 million, $11.7 million of which was recognized in 1998, and the sale of real estate resulted in a realized loss of $258,000, all of which was recognized in 1998.
Chastain also announced that GMAC Commercial Mortgage Corporation
("GMAC") has provided a commitment to purchase the Company's $21 million mezzanine investment in 277 Park Avenue for $10.5 million. Terms of the commitment provide Chastain an option to repurchase the investment until April 1, 2000, at a price that would provide GMAC an 8% annualized yield on its investment until October 1, 1999. After October 1, 1999, the repurchase price is set at $9,633,000. Chastain anticipates closing on this repurchase transaction on April 5, 1999, and using the proceeds to repay its borrowings and terminate its subordinated debt facility with Lend Lease Investments Holdings, Inc.
("LLIH"), an affiliate of Chastain's Manager. The maturity of the LLIH facility was extended to April 5, 1999, and as of March 31, 1999, had a balance of $8.5 million.
The Company expects that its net operating income combined with the closing of the GMAC repurchase will enable Chastain to meet its remaining corporate obligations, including $5.9 million of forward treasury lock liabilities due on April 30, 1999 and $5.0 million due on July 2, 1999. Based upon current cash flow projections, the Company does not anticipate making any dividend distributions until the treasury lock liabilities have been satisfied.
Chastain also announced the resignation of Rufus Chambers as President of the Company, effective immediately. Kurt Wright, Chief Executive Officer of the Company, has assumed the additional title and responsibilities of President. |
