Resource Capital Corp., a specialty finance company, purchases and manages a diversified portfolio of commercial real estate-related assets and commercial finance assets in the United States. The company invests in asset classes, such as commercial real estate-related assets, such as commercial real estate property, whole loans, A-notes, B-notes, mezzanine loans, commercial mortgage-backed securities, and investments in real estate joint ventures, as well as commercial finance assets, such as bank loans, lease receivables and other asset-backed securities, trust preferred securities, debt tranches of collateralize debt obligations, structured note investments, and private equity investment principally issued by financial institutions. Business Strategy The core components of the company’s business strategy are investment in real estate and commercial finance assets; managing its investment portfolio; and diversification of investments. Commercial Real Estate-Related Investments Whole loans: The company originates primarily first mortgage loans, or whole loans, directly to borrowers. The direct origination of whole loans enables the company to control the structure of the loans and to maintain direct lending relationships with the borrowers. As of December 31, 2012, the company modified 27 commercial real estate loans. Senior Interests in Whole Loans (A notes): The company invests in senior interests in whole mortgage loans, referred to as A notes, either directly originated or purchased from third parties. Subordinate Interests in Whole Loans (B notes): The company invests in subordinate interests in whole loans, referred to as B notes, which the company either directly originates or purchases from third parties. B notes are loans secured by a first mortgage but are subordinated to an A note. Mezzanine Financing: The company invests in mezzanine loans that are senior to the borrower's equity in, and subordinate to a first mortgage loan on, a property. These loans are secured by pledges of ownership interests, in whole or in part, in entities that directly own the real property. In addition, the company may require other collateral to secure mezzanine loans, including letters of credit, personal guarantees of the principals of the borrower, or collateral unrelated to the property. Commercial Mortgage-Backed Securities: The company invests in commercial mortgage-backed securities, which are securities that are secured by or evidence interests in a pool of mortgage loans secured by commercial properties. These securities may be senior or subordinate and may be either investment grade or non-investment grade. Commercial Real Estate Investments In 2011, the company began to invest directly in the ownership of commercial real estate as the company restructured two real estate loans to take control of properties. The company also acquired two multifamily real estate assets, one through a joint venture and another as wholly-owned by the company. The company primarily uses a related party, Resource Real Estate, a subsidiary of Resource America to manage these assets on its behalf. Other Real Estate Investments The company invests in joint ventures and other interests that finance the acquisition of distressed commercial properties and mortgage loans on distressed commercial properties. Structured Note Investments and Residential Real Estate-Related Investments The company invests in structured note investments and residential mortgage-backed securities as part of its trading portfolio. Structured note investments are investments in structured finance vehicles, principally collateralized loan obligation equity, which the company has classified as trading securities. These securities are typically subordinate to investment grade or non-investment grade assets. The majority of its structured notes have not been rated by any nationally recognized rating agencies. The company also invests in residential mortgage-backed securities, which are securities that are secured by or evidence by good interests in a pool of residential mortgage loans. These securities may be issued by government-sponsored agencies or other entities and may or may not be rated investment grade by rating agencies. Commercial Finance Investments Bank Loans: The company acquires senior and subordinated, secured and unsecured loans made by banks or other financial entities. Bank loans may also include revolving credit facilities, under which the lender is obligated to advance funds to the borrower under the credit facility as requested by the borrower from time to time. Preferred Equity: The company has a preferred equity investment in a leasing company that invests in small- and middle-ticket full payout lease receivables. Trust Preferred Securities and other ABS: The company has one investment in trust preferred securities. Trust preferred securities are issued by a special purpose trust that holds a subordinated debenture or other debt obligation issued by a company to the trust. The sponsoring company holds the equity interest in the trust, with the preferred securities of the trust being sold to investors Tax Status The company has elected to be taxed as a real estate investment trust (REIT) under the Internal Revenue Code of 1986, as amended. As a result, the company generally is not subject to Federal or State income taxation at the corporate level to the extent it distributes annually at least 90% of its REIT taxable income to its shareholders and satisfies certain other requirements.
resource capital corp
(RSO:New York Consolidated)
712 Fifth Avenue
New York, NY 10019
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