NEW YORKStarwoodCapital Group has made a $325 million strategic investment inmortgage lender TPG RE Finance.  Its non-votinginvestment, made in the formof preferred stock and detachable warrants to purchase thecompany's common stock, comes as the mortgage REIT struggles to regain itsfooting after issuing a goingconcern warning that it may not have enough liquidity to meet itsobligations and keep operations afloat. The REIT was hammered inMarch and April when the markets plunged and forced TPG Finance tosell assets in order to meet margin calls. 

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A handful of bidders hadreportedly been circling TPG RE Finance with offers, according to areport in Bloomberg, including Oxford PropertiesGroup and AlmanacRealty Investors. 

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Starwood Capital's investment will provide TPG RE with liquidityand access to additional capital at its option. Proceeds from theinitial closing will be used to make voluntary deleveragingpayments under some of the company's secured financing facilities,and for general corporate purposes.

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"With this recapitalization andthrough our new position as a TRTX stakeholder, we firmly believethe company is positioned for sustained long-term success and willgenerate meaningful value for its shareholders and the partners ofour fund moving forward," Ethan Bing, managing director of StarwoodCapital, says in prepared remarks. 

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Houlihan Lokey served as TRTX'sfinancial adviser and Kirkland & Ellis LLP served as TRTX'slegal advisor. Credit Suisse served as Starwood Capital's financialadviser and Sidley Austin LLP served as Starwood Capital's legaladvisor.

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