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Newcastle Investment Corp.
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Real Estate 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 2Q 2014

As of 2Q 2014, our real estate debt portfolio primarily consisted of:

  1. $0.76 billion face amount of assets (value of 82% of par) in CDOs financed with $0.4 billion of debt; total direct holdings of $0.4 billion

  2. $0.10 billion face amount of assets (value of 50% of par) in Other Debt financed with $0.23 billion of debt; total direct holdings of $0.78 billion

Composition of Real Estate Debt Portfolio

($mm, as of 06/30/14)

Assets

Financing

 
 

Fair Value

  Newcastle
Direct
Holdings(4)
Face Amount % $ Face Amount
CDOs  
CDO VI 158 78.9% 124 181 10
CDO VIII 341 76.6% 261 170(5) 171
CDO IX 452 81.4% 368 202(5) 251
Elimination(1) (192) 68.0% (131) (122) (71)
WA/Subtotal $759 82.1% $623 $431 $362
   
Other Debt Investments  
Other Debt(2) 107 53.0% 57 29 78
Eliminations(3) (6) 100.0% (6) (6) -
WA/Subtotal $101 50.2% $51 $23 $78
   
WA/TOTAL $859 78.4% $674 $454 $440

1) Represents the elimination of $192 million (value of $131 million) of debt issued by Newcastle and an investment in our golf business owned in the CDOs.
2) Assets include $10 million (value of $6 million) of Newcastle CDO V bonds. CDO V is not consolidated under GAAP.
3) Represents $6 million (value of $6 million) of debt financing “Other Real Estate Related Investments” which is held by consolidated CDOs.
4) Newcastle Direct Holdings represents the face amount of the assets less the face amount of the financing.
5) Includes $26 million and $53 million of repurchase agreements associated with CDO VIII debt 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.