Subsequent Events

9 Months Ended

Sep. 30, 2011

Subsequent Events [Abstract]

Subsequent Events

NOTE 16: SUBSEQUENT EVENTS

On October 5, 2011, we entered into an exchange agreement with Taberna VIII pursuant to which we issued four senior secured notes, or the senior notes, with an aggregate principal amount equal to $100 million to Taberna VIII in exchange for a portfolio of real estate related debt securities, or the exchanged securities, held by Taberna VIII. Taberna VIII is a subsidiary of ours and, as a result, the senior secured notes will be eliminated in consolidation. The senior notes and the exchanged securities were determined to have approximately equivalent fair market value at the time of the exchange.

The senior notes were issued pursuant to an indenture agreement dated October 5, 2011 and contains customary events of default, including those relating to nonpayment of principal or interest when due and defaults based upon events of bankruptcy and insolvency. The four senior notes have the following terms:

Note Number	Principal Amount		Fixed Interest Rate			Maturity Date
1	$	25,000		6.75	%	April 30, 2017
2	$	25,000		6.85	%	October 30, 2017
3	$	25,000		7.15	%	October 30, 2018
4	$	25,000		7.25	%	April 30, 2019

Interest accrues from October 5, 2011 and will be payable quarterly in arrears on October 30, January 30, April 30 and July 30 of each year, beginning October 30, 2011. The senior notes are secured and are not convertible into equity securities of RAIT.

In October 2011, we sold four commercial real estate mortgages with an unpaid principal balance of $60,869 for gross proceeds of $63,991. As of September 30, 2011, we were holding $64,152 in restricted cash that was pending the completion of our sale of four loans in October 2011.

During October 2011, we repurchased $34,231 in aggregate principal amount of our 6.875% Convertible Senior Notes due 2027, which are redeemable at the option of the holder in April 2012, for an aggregate purchase price of $34,347. As a result of these transactions we recorded a loss on the extinguishment of debt of $777.

Subsequent to September 30, 2011, we prepaid, in full, our $43,000 12.5% Senior Secured Notes due to mature in April 2014.

On October 27, 2011, we entered into a two year repurchase agreement, or the CMBS facility, pursuant to which we may sell, and later repurchase, performing whole mortgage loans or senior interests in whole mortgage loans secured by first liens on stabilized commercial properties which meet current standards for inclusion in commercial mortgage-backed securities, or CMBS, transactions. The aggregate principal amount of the CMBS facility is $100,000 and incurs interest at LIBOR plus 250 basis points. The CMBS facility contains standard margin call provisions and financial covenants.

Subsequent to September 30, 2011, we completed the conversion of one commercial real estate loan with a carrying value of $22,797 to real estate owned properties. We are completing the process of estimating the fair value of the assets acquired.