SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On July 12, 2023, the Company entered into and closed a matched-term non-recourse collateralized commercial real estate financing (the "LMF 2023-1 Financing"), secured by $386.4 million of first lien floating-rate multifamily mortgage assets which is not subject to margin calls or additional collateralization requirements. In connection with the LMF 2023-1 Financing, approximately $270.4 million of an investment grade-rated senior secured floating rate loan was provided by a private lender and approximately $47.3 million of investment grade-rated notes (collectively, the "Senior Debt") were issued and sold to an affiliate of LFT's external manager, Lument IM. A consolidated subsidiary of LFT retained the subordinate interests in the issuing vehicle of approximately $68.6 million. The Senior Debt has an initial weighted average spread of approximately 314 basis points over 30-day Term SOFR, excluding fees and transaction costs. The Senior Debt matures on the payment date in July 2032, unless it is sooner repaid or redeemed in accordance with its terms.

The initial collateral pool securing the Senior Debt consists of 25 first lien floating rate mortgage loans and participations in first lien mortgage loans secured by 32 multifamily properties located across the United States. In connection with the LMF 2023-1 Financing, collateral with an unpaid principal balance of $376.2 million was acquired by an LFT subsidiary at an aggregate discount to par of approximately 1.5% plus interest accrued on the collateral as of July 12, 2023. The weighted average spread of the initial collateral was approximately 365 basis points over 30-day Term SOFR. All the mortgage assets were originated by LSF. LMF 2023-1 provides for a 24-month reinvestment period that allows principal proceeds from repayments of the mortgage assets to be reinvested in qualifying replacement mortgage assets, subject to certain conditions.

As of the closing date, LSF had approximately $28.6 million of unfunded commitments to the initial collateral pool of mortgage assets. LSF will have the sole obligation to make future advances under such commitments.

Through its ownership of the equity of LMF 2023-1, the Company intends to own the related mortgage assets until maturity and will account for the Senior Debt on its balance sheet as a financing.