“This commitment led by Ares further enhances our strong liquidity position and diversifies our financing sources away from traditional bank repo markets and gives us the ability to seek new investment opportunities,” Matt Lambiase, president and CEO of Chimera, said.
The lenders in the Chimera/Ares transaction will receive a 7% coupon on the term loan and price appreciation warrants that can be settled in cash at a discount to the market value.
“Recent market volatility has created turbulence across the spectrum of asset markets. This has led to opportunities for Ares Alternative Credit to have constructive conversations with borrowers about the capital solutions we can offer,” Kevin Alexander, partner in alternative credit at Ares, said. “We believe Chimera is well positioned in its industry and we are pleased to support the company in its next phase of growth.”
Chimera is a publicly traded REIT that is primarily engaged in the business of investing directly or indirectly through subsidiaries, on a leveraged basis, in a portfolio of mortgage assets, including residential mortgage loans, non-agency RMBS, agency CMBS, agency RMBS and other real estate related securities.
Ares Management is an alternative investment manager operating integrated businesses across credit, private equity and real estate. Ares’ alternative credit strategy focuses on direct lending and investing in assets that generate contractual cash flows and fills gaps in the capital markets between credit, private equity and real estate.