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Newcastle Investment Corp.
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Real Estate & Other Debtprint

We actively manage CDOs and several other real estate investments.  Our investments are primarily secured by or related to commercial real estate.  To enhance our returns, we seek to execute on strategies such as collapsing our CDOs or opportunistically investing within our CDOs.

Portfolio as of 4Q 2013

As of 4Q 2013, our real estate debt portfolio primarily consisted of:

  1. $1.1 billion face amount of assets (value of 84% of par) in CDOs financed with $0.6 billion of debt; total direct holdings of $0.5 billion

  2. $0.5 billion face amount of assets (value of 84% of par) in Other Debt financed with $0.3 billion of debt; total direct holdings of $0.2 billion

Composition of Real Estate Debt Portfolio

($mm, as of 12/31/13)

Assets

Financing

 
 

Fair Value

  Newcastle
Direct
Holdings(5)
Face Amount % $ Face Amount
CDOs  
CDO VI 166 74.2% 123 188 11
CDO VIII 569 79.6% 445 280(6) 289
CDO IX 540 78.2% 430 251(6) 289
Elimination(1) (189) 47.4% (90) (122) (68)
WA/Subtotal $1,086 83.6% $909 $599 $521
   
Other Debt Investments  
MH Loan Securitizations 232 90.2% 209 168 64
Other Investments(2) 402 83.8% 337 252 150
Eliminations(3) (95) 96.8% (92) (95) -
WA/Subtotal $539 84.2% $454 $325 $214
   
Agency ARM RMBS(4) $515 106.1%  $546  $516  $30
           
WA/TOTAL $2,140 89.2% $1,909 $1,440 $765

1) Represents the elimination of $189 million (value of $90 million) of debt issued by a CDO and owned in the CDOs.
2) Assets include $10 million (value of $2 million) of Newcastle CDO V bonds. CDO V is not consolidated under GAAP. Other Investments also includes the Golf Business which was made in 4Q 2013.
3) Represents $66 million (value of $63 million) of debt financing “Other Real Estate Related Investments” which is held by consolidated CDOs, and $29 million value of debt financing at the Golf Business, which is eliminated in consolidation.
4) Excludes $5 million of principal receivables at December 31, 2013.
5) Newcastle Direct Holdings represents the face amount of the assets less the face amount of the financing except for Agency RMBS, which represents fair value of assets less face of financing.
6) Includes $61 million and $15 million of repurchase agreements associated with CDO VIII and CDO IX debt, respectively.

More detailed information about our business is included in our reports filed with the Securities and Exchange Commission (SEC). These reports describe, among other things, certain risks that could have a material adverse impact on our ability to achieve our business objectives, realize our expected investment returns, and pay dividends. We urge you to review these risks and the other information in our SEC reports.