California-based commercial real estate lender Pelorus Capital Group priced a securitization for cannabis-related real estate assets, calling it a first for the industry.
Institutional investors and hedge funds bought $45 million in bonds and Pelorus retained $70 million of the offering, according to a news release.
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The one-tranche securitization was priced at 600 basis points over a one-month Secured Overnight Financing Rate, which was 5.07% when the deal closed July 28.
In a commercial real estate securitization, loans are pooled and packaged together as a collateralized loan obligation, then sold to investors on the secondary market.
“Most industry insiders, lenders and investors believed securitization would never happen in the cannabis sector without a change in legislation,” Dan Leimel, CEO of Pelorus Capital Group and manager of the Pelorus Fund, said in a statement.
“We couldn’t be prouder to prove them wrong.”
Pelorus Managing Partner Travis
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