ACRES Capital acquired Exantas Capital’s management agreement from an affiliate of C-III Capital Partners. In addition, Exantas Capital entered into separate definitive agreements with Massachusetts Mutual Life Insurance Company and a fund managed by Oaktree Capital Management for new capital commitments aggregating up to $375 million.

MassMutual will provide a $250 million seven-year senior secured financing facility that can be utilized to fully repay Exantas’s warehouse and repurchase facilities, thereby reducing the potential for any future margin calls under such facilities. The facility has an advance rate of 55% and an interest rate of 5.75%, with operating terms that include a two-year revolving period followed by a five-year term, with no prepayment penalty after year one.

In addition, Oaktree and MassMutual will provide a commitment of up to $125 million in the form of seven-year unsecured notes. The unsecured notes have a cash interest rate of 8.75% and a PIK interest rate of 3.25%, totaling an annual interest rate of 12%. The company issued $50 million of unsecured notes to Oaktree and MassMutual at closing and may draw up to an additional $75 million over the next 18 months at Exantas’s option.

In connection with the $50 million unsecured notes issued at closing, Exantas also issued to Oaktree and MassMutual warrants to purchase an aggregate of 1.4 million shares of common stock at an exercise price of $0.01 per share. In connection with the issuance of the remaining $75 million of additional unsecured notes, Exantas will issue Oaktree and MassMutual additional warrants to purchase an aggregate of 2.1 million additional shares ratably as commitments are funded.

Exantas expects the new financing to provide ample liquidity to meet current financing requirements and for new investments. As a result of the transaction, Exantas’s new manager, ACRES, assumed management responsibility effective immediately and will begin to implement the company’s business plan to preserve and grow book value and earnings.

“Exantas has assembled a high quality portfolio and strong market position that we intend to continue to grow into a market leader in commercial real estate lending,” Andrew Fentress, co-founder of ACRES and newly appointed chairman of the board of Exantas, said. “The financings provided by MassMutual and Oaktree are a testament to the strength and quality of Exantas’ business and portfolio and we expect the financings will allow us to navigate the evolving market and execute on our objective to deliver long-term value to shareholders. We look forward to discussing our plans on the second quarter earnings call.”

ACRES is a middle market commercial real estate lender led by a management team with public company and mortgage REIT operating experience.

In connection with the transactions, ACRES and Exantas entered into an amended and restated management agreement. In addition to Fentress’ appointment as chairman of the board, fellow ACRES co-founder Mark Fogel will serve as president, CEO and board member of Exantas. Andrew Farkas and Jeffrey P. Cohen resigned from the board of directors with immediate effect. ACRES added 18 professionals from the former C-III team to its staff, including David Bryant, current CFO of Exantas, who will remain with the company in his current role to maintain operational continuity.

JMP Securities served as Exantas’s financial adviser and Morrison & Foerster served as Exantas’s legal advisor. Ledgewood served as special counsel to Exantas. Raymond James served as ACRES’ financial adviser and Hunton Andrews Kurth and Cadwalader, Wickersham & Taft served as ACRES’ legal advisors. Clifford Chance served as C-III Capital Partners’ legal advisor.

Exantas Capital is a real estate investment trust primarily focused on originating, holding and managing commercial real estate mortgage loans and other commercial real estate-related debt investments.