Crystal River Sets IPO

Crystal River Capital, an investment company formed in 2005 by Hyperion Capital Management, is set to launch its initial public offering in the next couple of weeks. The mortgage REIT is planning to raise $460 million in the IPO, which is being underwritten by Deutsche Bank Securities, Citigroup and Wachovia. Crystal River will sell its shares at $25. The banks had no comment.

Crystal River Capital, an investment company formed in 2005 by Hyperion Capital Management, is set to launch its initial public offering in the next couple of weeks. The mortgage REIT is planning to raise $460 million in the IPO, which is being underwritten by Deutsche Bank Securities, Citigroup and Wachovia. Crystal River will sell its shares at $25. The banks had no comment.

The REIT is the latest offering from Lewis Ranieri, who started up Hyperion after his tenure as vice chairman of Salomon Brothers. It will invest primarily in residential and commercial mortgage-backed securities, whole loans, bridge loans, b-notes and mezzanine loans, according to its Securities and Exchange Commission filing. Crystal River will also make direct real estate investments and preferred equity investments in real estate.

Crystal River will use interest rate swaps to hedge floating-rate exposure in its CMBS portfolio. The company is also expected to issue CDOs backed by commercial real estate as a financing tool, the prospectus said.

Besides Ranieri, other major investors are Branscan Asset Management, Glenview Capital Management, Omega Advisors and Third Avenue Management. The company raised $405.6 million in a private offering in March. It plans to list on the New York Stock Exchange under the symbol CRZ. Crystal River and Hyperion officials declined to comment.