It consists of EUR 558 million ($726.6 million USD) ofinvestment grade notes, EUR 19 million ($24.7 million USD) ofnon-investment grade notes, and EUR 23 million (nearly $30 millionUSD) of unrated notes. At the time of the issuance, Jan. 31, theweighted-average interest rate of the investment grade securitieswas Euribor (Euro Interbank offered rate) plus 49 basis points.Certain of the non-investment grade notes, not quantified in acompany statement, and the unrated notes were purchased by a RAITsubsidiary.

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The aggregate outstanding balance of the assets acquired by theCDO on the closing date was approximately EUR 360 million ($469million USD). Taberna expects to use the remainder of the netproceeds, EUR 240 million (approximately $312.9 million USD) toacquire similar assets by Jan. 31, 2008, which is the ramp-upcompletion date.

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This is the ninth CDO transaction managed by RAIT and itssubsidiaries. It is the financial REIT's first European-dominatedCDO, and, in a statement, the company says it believes this thefirst issuance of a European CDO that is backed primarily bysubordinated and senior debt issued by real estate companies inEurope.

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"The CDO transaction is a private transaction," a RAIT spokesmantells GlobeSt.com and says information is limited to that containedin the company's statement. Asked if more such transactions areanticipated, he adds, "I can't project what we expect to do goingforward at this point."

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RAIT, headed by Betsy Cohen, chairman, and Daniel Cohen, chiefexecutive officer, was formed via a merger of RAIT Investment Trustand Taberna Realty Finance Trust on Dec. 11, 2006. The ability toclose and manage CDOs was among the benefits gained by the merger,Betsy Cohen said during the Dec. 11 shareholder meeting.

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Following news of the Europe CDO's closing, share of RAS hit anew 52-week high of $37.53 per share on the NYSE. That compareswith a 52-week, pre-merger low of $24.81 a share, reached on May17, 2006.

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