Fitch Rates Ladder Capital's Senior Notes 'BB'

NEW YORK--(BUSINESS WIRE)--Fitch Ratings rates Ladder Capital Finance Holdings LLLP and Ladder Capital Finance Corporation's (collectively, Ladder) $325 million senior notes 'BB'. The notes have a coupon of 7.375% and will mature on Oct. 1, 2017.

The notes are unsecured and will rank equally in right of payment to all of Ladder's existing and future unsecured unsubordinated debt. The notes feature an optional redemption at the company's option, subject to make-whole provisions. The notes are also subject to early redemption in the event of a change of control and a downgrade of one or more notches as a result of the change in control, unless the company is rated investment grade.

Given that the proceeds from the issuance are expected to be used to repay certain of Ladder's outstanding borrowings, Fitch does not believe there will be a material impact on the company's leverage levels as a result of the issuance. Ladder's leverage, measured as debt to equity, was 1.6x at June 30, 2012.

RATING DRIVERS AND SENSITIVITIES

Ladder's ratings reflect its experienced management team, conservative leverage profile, strong credit and operating trends, and adequate liquidity. Rating constraints include the company's predominantly secured funding profile, with a heavy reliance on short-term funding, limited operating history and revenue diversity, 'key man' risk, and the cyclicality inherent in commercial real estate markets.

The following factors may have a positive impact on Ladder's ratings and/or Outlook:

--Improved funding profile with more longer-term financing sources;

--A material decline in short-term funding;

--Stronger unencumbered liquidity levels;

--Consistent and sustained profitability and credit performance through multiple market environments, while maintaining a conservative leverage posture.

The following factors may have a negative impact on Ladder's ratings and/or Outlook:

--Deterioration in asset quality;

--Material operating losses;

--A reduction in liquidity relative to outstanding debt;

--An increase in leverage beyond the company's articulated target;

--Material adverse changes to the company's management team.

Fitch currently rates Ladder as follows:

Ladder Capital Finance Holdings LLLP

Ladder Capital Finance Corporation

--Long-term Issuer Default Ratings 'BB';

--Senior unsecured debt 'BB'.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Finance and Leasing Companies Criteria' (Dec. 12, 2011);

--'Global Financial Institutions Rating Criteria, (Aug. 15, 2012);

--'Criteria for Rating U.S. Mortgage REITs and Similar Finance Companies' (Feb. 27, 2012).

Applicable Criteria and Related Research:

Finance and Leasing Companies Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=659834

Global Financial Institutions Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Criteria for Rating U.S. Mortgage REITs and Similar Finance Companies
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=671870

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