In one transaction, Kramont sold an $8.2-million, 13.25% mortgage note receivable to Bank of America for $10.4 million, incurring a $2.2-million premium over the current balance. Called the Boca Note, because it was secured by a first mortgage on the recreation facilities at the Century Village adult condo property in Boca Raton, FL, it was issued in December 1981 and scheduled to mature in January 2012. The note was due from H. Irwin Levy, chairman of Kramont's board. New York-based Weiser Realty Advisors, formerly Grubb & Ellis' Landauer Group, advised Kramont that the sale represented fair value.

In connection with the sale of the Boca Note, Kramont simultaneously prepaid $13.7 million of collateralized mortgage obligations with an effective interest rate of 8.84% and incurred a pre-payment penalty of about $1 million. It replaced this financing with a new secured loan from Bank of America for $14.5 million with an effective interest rate of 5.15% through December 2006.

In addition to their contribution to net proceeds, these transactions are expected to generate a one-time increase of about $1 million in income to holders of Kramont common stock and to FFO for the second quarter of this year.