Rialto to Sell $250M of Debt

Nonconforming

Rialto Holdings LLC, a subsidiary of Lennar Corp., plans to sell $250 million of debt in a private offering.

The debt consists of senior notes which will be due in 2018.

The proceeds will be used to provide working capital for Rialto Mortgage Finance LLC and for investments in funds or entities managed by Rialto Capital Management LLC. Plus some of the proceeds will repay Lennar for money it advanced to Rialto.

Moodys rates the notes B2 with a stable rating. What can move the rating up is that Rialto is continuing to grow its asset management business profitably and expand its commercial mortgage operations.

Problems in establishing the commercial mortgage origination business could result in a downgrade, the rating agency says.

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