Newcastle Investment Corp has completed the sale of its manufactured housing portfolio, which had a face value of USD222 million and was sold at a price of 104 per cent of par, or USD231 million of proceeds.
Part of the proceeds from the sale will be used to pay off the current debt on the portfolio at par, including USD132 million of third-party debt and USD20 million of debt owned by CDO VIII and CDO IX.
The sale resulted in total proceeds to Newcastle of USD85 million. Newcastle received USD79 million of proceeds relating to its equity investment in the portfolio and USD6 million of net proceeds through its ownership in the senior class of CDO VIII.
Newcastle’s cost basis in the portfolio was 93 per cent of par. The sale will generate a gain of approximately USD20 million in the second quarter of 2014 after deal expenses and unamortised discount on third-party debt.