Mesirow Forms CTL Lending Group

Private Placement Letter (via StructuredFinanceNews.com) - July 15, 2010

Mesirow Financial has hired industry veteran Stephen Jacobson to build and lead its credit tenant lease (CTL) team, the company said.

Jacobson serves as a senior managing director in the global markets group for the CTL product. He joins from William Blair, where he spent 15 years and established that firm's CTL group. Prior to his 20-year career at William Blair, Jacobson was involved in public finance, focused on the New England area.

Mesirow is in the process of building its own team and plans to have a minimum of four originators, Jacobson told ASR sister publication Private Placement Letter. These individuals will compliment the fixed-income sales and trading group, which is made up of 120 representatives. Mesirow is actively soliciting and attempting to gain CTL placement mandates, he said.

CTLs provide financing to owners of single tenant commercial properties located in the U.S. The loan is secured based on the underlying lease and the financed property. Furthermore, the tenants are investment-grade credits. The CTL market follows the schedule of the NAIC and does not extend credit to tenants rated less than 'BBB-', Jacobson said.

"The investment market for CTL placements is ripe due to lenders seeking higher yielding investment grade products," Jacobson said, which is one of the reasons Mesirow has started a CTL group. During 2007 and 2008, the CTL market lost business to CMBS.

After the decline of CMBS products, CTLs are once again gaining favor and are experiencing an increase in institutional demand, he said. Additionally, since CTL transactions are done via private placements, investors typically see higher yields than they do for public offerings of the same credits.

Chicago-based Mesirow Financial is a diversified financial services firm. It has in excess of $40 billion in assets under management and specializes in investment management, global markets, insurance services and consulting. Sphere: Related Content