Am I understanding this correctly? How can they make money borrowing like this?
Their yield on CMBS is 12.78%.
Barrow is 6.5% + One Month Libor which is like 0.19%, so lets call is 6.7%.
They said last Quarter their CMBS short term financing was 7.8%.
6.7% looks better than 7.8% and they are locked for three years since they did a three year repo.
At the end of the day every little bit helps.
You can look at it simply as they just added a point of spread to 52 million on CMBS.
I assume its 6.09% OF one month Libor though that sounds too good.