Description

RAIT financial bonds trading at a 21 and change represent good value given the Debtor’s Restructuring Support Agreement, “subject to the consummation of the Sale Transaction and confirmation of the Debtors’ Plan, would result in all other creditors of the Debtors, including the holders of the 7.125% Senior Notes, the holders of the 7.625% Senior Notes, and all administrative, priority and general unsecured claims, receiving payment in full, in cash of their allowed claims (Docket Entry 7).”

On August 30, RAIT Financial Trust announced that it has into entered into an Equity and Asset Purchase Agreement (the “Purchase Agreement”) to sell substantially all of its assets to an entity owned by funds managed by affiliates of Fortress Investment Group LLC (“Fortress”) in a sale process under Section 363 of the United States Bankruptcy Code, as amended (the “Bankruptcy Code”). In addition, RAIT also announced that it has commenced voluntary proceedings for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) for it and certain of its subsidiaries to facilitate the sale process.

The Purchase Agreement provides RAIT with a binding bid of approximately $174.4 million, subject to adjustment, along with the assumption of certain liabilities, which is subject to higher or better offers in the bidding process described below. The Purchase Agreement contains customary closing conditions to the obligations of the parties.

RAIT plans to file a motion with the Bankruptcy Court seeking approval of bid procedures in connection with the sale to Fortress. The sale and bid procedures will provide for notice to be given to third parties of the pending sale to Fortress and offer the opportunity for interested parties to submit higher and better bids for RAIT’s assets or propose an alternative transaction. Once the bid procedures have been approved by the Bankruptcy Court, RAIT will initiate the formal bidding process, and at such time interested parties will be able to obtain more information on the bidding process.

Catalyst

A greater understanding of bankruptcy plan treatment of the bonds