Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events

Subsequent Events

16. Subsequent Events

On January 30, 2012, Starwood Property Mortgage Sub-7 ("SPM Sub-7"), our indirect wholly-owned subsidiary, purchased floating rate CMBS for $206.4 million ($222.8 million face value) where the obligors are certain special purpose entities that were formed to hold substantially all of the assets of a worldwide hotel operator of hotels, resorts and timeshare properties. The CMBS is not currently rated but the loan-to-value ratio was estimated by management to be in the range of 39%-44% at December 31, 2011. The CMBS currently pays interest at a rate of one-month LIBOR plus a spread of 1.75%. In the event of full extension, the spread will increase to 3.3%. In addition, on February 1, 2012, SPM Sub-7 entered into a $155.4 million master repurchase agreement with Goldman Sachs International (the "Second Goldman Repurchase Agreement") and borrowed the entirety of the facility to finance the CMBS purchase. Borrowings under the Second Goldman Repurchase Agreement accrue interest at a per annum rate of one-month LIBOR plus a spread of 2.9%. The maturity date of the Second Goldman Facility is August 2015. Under the terms of the Second Goldman Repurchase Agreement, SPM Sub-7 would be required to pay a make whole premium upon any acceleration of the facility. Additionally, Goldman Sachs International retains discretion, subject to certain conditions, over the market value of the CMBS for purposes of determining whether we are required to pay margin.

        On February 23, 2012, the Company originated a $40 million mezzanine loan secured by a 10-property portfolio of full-service and extended-stay hotels located in eight different states. The Company's expected levered return on the investment exceeds 12%.

        On February 28, 2012, the Company acquired $95.3 million of B notes secured by four resorts in the United Kingdom. The Company's expected levered return on the investment ranges from 11-12%. The newly issued B notes are part of an overall corporate refinancing in which the Company had a $143.9 million pre-existing investment.

        On February 29, 2012, our board of directors declared a dividend of $0.44 per share for the first quarter of 2012, which is payable on April 13, 2012 to common stockholders of record as of March 30, 2012.