iStar Financial cuts $724 million debt, posts $54 million loss in Q1

By Lisa Kerner

Charlotte, N.C., April 27 - iStar Financial Inc. retired $724 million of debt during the first quarter of 2012 and ended the period with cash and cash equivalents totaling $609.7 million.

The company entered into a new $880 million senior secured credit agreement and used the proceeds to repurchase $124.1 million of notes maturing in 2012 and to repay the $244 million remaining balance of its revolving credit facility due June 2012.

Remaining proceeds will be used to refinance unsecured debt maturing in 2012, according to the company's first-quarter earnings release.

iStar also repurchased $96.3 million of senior notes and repaid the remaining $169.7 million of its 5.15% senior notes due March 2012.

The company repaid $89.8 million on the 2011 A-1 tranche of its secured credit facility, bringing the balance to $871.8 million at quarter's end.

iStar reported leverage of 2.7 times at March 31, unchanged from the prior quarter. The weighted average effective cost of debt for the first quarter was 5.8%.

Net loss for quarter

For the first quarter, iStar reported a net loss allocable to common shareholders of $54.8 million, compared with $67.4 million for the first quarter of 2011.

During the first quarter, the iStar generated $214.8 million of proceeds from its portfolio, comprised of $136.2 million of principal repayments, $51.4 million primarily from unit sales of other real estate owned assets, $6.5 million from sales of net lease assets and $20.7 million from other investments.

iStar said it funded $23 million of investments during the period.

At March 31, iStar's total portfolio had a carrying value of $6.82 billion, gross of general loan loss reserves. The portfolio was comprised of $2.67 billion of loans and other lending investments, $1.67 billion of net lease assets, $2.00 billion of owned real estate and $468.6 million of other investments.

The company's $2.01 billion of performing loans and other lending investments had a weighted average last dollar loan-to-value ratio of 76% and a weighted average maturity of 3.1 years at the end of the quarter.

iStar is a New York-based finance company focused on the commercial real estate industry.

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