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NEW YORK CITY-A specialty finance company that was formed in January by Hyperion Capital to invest in real estate-related securities, loans and instruments and various other asset classes has filed for an initial public offering that could raise up to $460 million. The number of shares and pricing was not listed in the filing. The prices at which the selling stockholders may sell the shares will be determined by prevailing market prices or through privately-negotiated transactions. The company will not receive any proceeds from the sale of any of the shares.

Crystal River Capital will elect and intend to qualify to be taxed as a REIT. In its SEC filing, the firm lists it objective as "to provide attractive returns to our investors through a combination of dividends and capital appreciation. To achieve this objective, we are investing primarily in and intend to continue to invest primarily in residential mortgage-backed securities, or RMBS, and commercial mortgage-backed securities, or CMBS, whole mortgage loans, bridge loans, junior interests in mortgage loans known as B Notes and mezzanine loans." Crystal River also invests in--and intends to continue to invest in opportunistically in direct real estate interests and preferred equity interests in entities that own real estate, diversified asset-backed securities, or ABS, including aircraft and consumer obligations, and collateralized debt obligations.

Deutsche Bank Securities, Citigroup and Wachovia Securities will serve as underwriters of the offering. According to the filing, the company currently targets and expects to continue to target "asset classes that have limited price volatility risk, yet provide consistent, stable returns."

The company also intends to make selective debt and/or equity investments in certain alternative assets, which may include power generating facilities, timber and private equity funds managed by certain affiliates that invest in such assets, to diversify its portfolio and enhance risk-adjusted returns. On Nov. 30, Crystal River closed a $295.3-million private placement of CDOs; its first sponsored CDO financing. In March, the REIT completed a private offering which raised approximately $405.6 million.

The REIT's common stock will be listed on the New York Stock Exchange as CRZ. The firm is externally managed and advised by Hyperion Crystal River, a wholly owned subsidiary of Hyperion Capital. In exchange for its services, the firm pays Hyperion Crystal River an annual base management fee as well as an incentive management fee based on performance. Hyperion Crystal River has retained Brascan Asset Management as a sub-advisor with respect to investments in real estate and other real estate-related, yield-oriented assets and Ranieri & Co. as a sub-advisor for senior level guidance and relationships.

Instant Insights /

Crystal River Files for $460M IPO

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