S&P rates Ladder Capital notes BB-

S&P said it assigned its BB- senior unsecured debt rating on Ladder Capital Finance Holdings LLLP’s proposed offering of $500 million of senior notes due 2027.

The debt rating is one notch below S&P’s BB long-term issuer credit rating on Ladder because the company’s priority debt is greater than 30% of assets, although unencumbered assets comfortably cover the unsecured debt.

Ladder intends to use the proceeds to repay secured indebtedness, including loan repurchase debt under committed master repurchase agreements.

“Our ratings on Ladder reflect its concentration in the highly cyclical and competitive commercial real estate market and its partial reliance on secured repurchase facilities that have the potential for margin calls. The company’s conservative management of its leverage and liquidity, its diverse revenue sources, and its current access to borrowings from the Federal Home Loan Bank System mitigate these risks,” said S&P in a press release.

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