CORAL GABLES, FL Korth Direct Mortgage Inc. (“KDM”), a leading middle-money commercial real estate lender, announced it closed a private placement offering to “qualified institutional buyers(1)” of 19,000 shares of its Series B Preferred Stock for gross proceeds of $19.0 million. Net proceeds will be used for general corporate purposes, which may include supporting future growth and KDM’s transition to a better execution model through aggregation of mortgage secured notes collateral.

Brean Capital, LLC served as KDM’s exclusive financial advisor and placement agent in connection with the offering.

In addition, KDM announced that it received a BBB+ corporate investment grade rating from Egan Jones Ratings Company, a nationally recognized statistical rating organization. The rating was received in connection with the transaction, which was also investment grade rated.

“Brean Capital is a valued partner to KDM. We appreciate their expertise and execution abilities to achieve this transformative transaction.  We look forward to using the capital injection from our Series B Preferred Stock offering to achieve scale that we anticipate will accelerate both our growth and profitability,” stated Holly MacDonald-Korth, President and CFO. “We have a national lending footprint, in-house servicing, a dozen account executives on our origination team, and nearly $300 million in originations since inception. We believe that this strong foundation, combined with the additional capital, will be the springboard to our next stage of growth.”

“This is a truly transformational event for KDM that we anticipate will bring us to the next level of executing our business strategy,” said Pam Hipp, Managing Director of Fixed Income. “This will assist us in completing financings that were previously beyond our reach without this rating. The investor response to our securitization platform is expanding with each deal and our unique approach is building long-term value in the CRE debt markets.”

“We believe achieving an investment grade corporate rating is an important external confirmation of our business model and what we have been building here at KDM,” commented Jon Paul Lauria, Vice President of Business Development. “As a vertically integrated originator, lender, servicer, and securitizer of commercial real estate debt, we believe the investment grade rating will be instrumental in facilitating a more cost-efficient capital structure for our business.”

Korth Direct Mortgage Inc. is a vertically integrated originator, lender, servicer, and securitizer of first lien commercial real estate debt based in Coral Gables, Florida. KDM specializes in lending on income producing real estate, typically light industrial, warehouse, office, multi-family and medical properties. KDM provides flexible institutional capital as a common-sense lending partner and manages borrowers through the entire loan life cycle. KDM issues Mortgage Secured Notes (“MSNs”) to fund its loans. MSNs are registered corporate bonds (“KDMMTG” on Bloomberg). Find more information about KDM’s lending platform at www.kdmfinancial.com and visit the company’s corporate website at www.korthdirect.com.

Brean Capital’s Investment Banking Group is dedicated to helping its clients achieve their strategic and financial goals. For more than 40 years, the Firm has specialized in providing capital raising, M&A and financial advisory services to middle market businesses. Throughout its history, Brean Capital has established a track record of providing its clients with deep market knowledge, commitment and experience to ensure a successful transaction.  For more information, please visit: www.breancapital.com/InvestmentBanking.

(1) As defined in Rule 144A under the Securities Act of 1933, as amended.

Contact the team
Interested to learn more and see how Brean Capital can help your business? Contact the team below:

Managing Director
(212) 702-6565
CTognola@breancapital.com

Managing Director
(212) 702-6614
ONaporano@breancapital.com

Managing Director
(212) 702-6576
MCoogan@breancapital.com

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