Magazine article American Banker

Florida REIT Sells Stake to Citi

Magazine article American Banker

Florida REIT Sells Stake to Citi

Article excerpt

Opteum Inc. said Thursday that it had sold a 7.5% stake in its mortgage lending unit to Citigroup Inc. for $4.1 million and amended a credit agreement with Citi to reduce the unit's borrowing costs.

The Vero Beach, Fla., real estate investment trust also gave Citi the option to buy another 7.49% of Opteum Financial Services LLC in Paramus, N.J., for $4.1 million if a deal can be arranged by Dec. 21, 2007.

Citi's stake values the unit at roughly $55 million. Last year, when the REIT, then known as Bimini Mortgage Management Inc., agreed to buy Opteum Financial, analysts estimated the total consideration at $80 million. Still, that deal required Opteum Financial to have a minimum book value of only $60 million at closing. (When the deal closed in October 2005, Bimini took Opteum's name.) Calls to Opteum and Citigroup were not returned Thursday.

In a press release, Opteum said the amendments to its credit agreement would produce "substantial cost savings" for the lending unit. Jeffrey J. Zimmer, Opteum's chairman and chief executive, called Citi's investment "a strong vote of confidence."

Peter R. Norden, a senior executive vice president at the REIT and the president and chief executive of Opteum Financial, said in the release: "With lower funding costs and even greater access to capital, we are well positioned to profitably increase our market share as we leverage our multichannel mortgage origination platform."

This week Mr. …

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