Repayment of Investments - During the first quarter, ARI received principal repayment from the following investments:
•The repurchase agreement secured by CDO bonds was repaid in full. Upon the repayment, the Company realized a 17% IRR on its investment; and
•Two mezzanine loans totaling $50 million secured by a portfolio of retail shopping centers located throughout the United States were fully repaid. In connection with the repayment, the Company received a yield maintenance payment totaling $2.5 million. Including the yield maintenance payment, the Company realized a 15% IRR on its mezzanine loan investment.
Amendment to JP Morgan Facility - In February 2013, the Company amended its JPMorgan Facility to extend the term for two years (one year initial term with a 364 day extension option). Pricing on the JPMorgan Facility will remain at LIBOR+2.5% and ARI paid a 0.5% extension fee for the first year and will pay a 0.25% extension fee for the second year. The Company primarily uses the JPMorgan Facility to finance ARI's first mortgage loan investments.
Amendment to Wells Facility - In February 2013, the Company amended its Wells Facility to reduce the interest rate as follows: (i.) with respect to the outstanding borrowings used to provide financing for the AAA CMBS, the interest rate was reduced to LIBOR+1.05% from LIBOR+1.25% - 1.50% (depending on the collateral pledged); and (ii.) with respect to the outstanding borrowings used to provide financing for the Hilton CMBS, the interest rate was reduced to LIBOR+1.75% from LIBOR+2.35%. In addition, the maturity date of the Wells Facility with respect to the outstanding borrowings used to provide financing for the AAA CMBS was extended to March 2014.
Corporate Governance - In February 2013, the Board of Directors appointed Megan Gaul as Chief Financial Officer, Secretary and Treasurer of the Company, effective April 1, 2013. Ms. Gaul will assume these titles from Mr. Rothstein, who holds these titles in addition to his existing titles of Chief Executive Officer and President. Ms. Gaul previously served as the Controller of the Manager, a position she has held since she joined Apollo Global Management, the indirect owner of the Manager, in 2009.
Dividend - The Board of Directors declared a dividend of $0.40 per share of common stock, which is payable on April 12, 2013 to common stockholders of record on March 29, 2013. This is the eleventh consecutive quarter the Company has paid a $0.40 per common share dividend.
Annual Meeting - The Board of Directors also set March 6, 2013 as the record date for its 2013 Annual Meeting of Stockholders. The 2013 Annual Meeting of Stockholders will be held on May 2, 2013 at the offices of Clifford Chance US LLP at 31 West 52nd Street, New York, New York.
Definition of Operating Earnings
Operating Earnings is a non-GAAP financial measure that is used to approximate cash available for distribution and is defined by the Company as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) non-cash equity compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding) and (ii) any unrealized gains or losses or other non-cash items included in net income available to common stockholders. The table provided below reconciles Operating Earnings to net income available to common stockholders.
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