An affiliate of Fortress Investment Group LLC that manages collateralized debt obligations opted to allow the redemption of $75 million of trust preferred securities issued by Crescent Real Estate Equities LP for 15 percent of their face amount, Moody’s Investors Service said.
Crescent’s TruPS were contained in three CDOs in the Taberna series, according to statements today from the New York- based ratings company.
The payments, in the form of Treasury bills, were made by Barclays Capital Real Estate Finance Inc., and agreed to by “consent of the majority of the controlling class and hedge counterparty” in each of the deals, Moody’s said.
In November, a Morgan Stanley investment fund agreed to hand over Crescent, which it acquired in 2007 as property prices peaked, to a joint venture of a Barclays Plc unit and Goff Capital Inc., ending the New York-based firm’s obligation on a $2 billion loan after almost $1 billion in losses.
A Fortress affiliate, TP Management, assumed the management of Taberna CDOs earlier this year from a unit of Philadelphia- based RAIT Financial Trust. Gordon E. Runte, a spokesman for New York-based Fortress, declined to immediately comment.
TP Management also has agreed to swap $52.5 million of TruPS issued by Gramercy Capital Corp. in two Taberna CDOs for a similar amount of other CDOs and additional Treasury bills, according to Moody’s statements today.
Trust preferred securities have a combination of debt and equity characteristics. They are issued by trusts formed by companies raising cash.