Northstar Realty Finance is focusing on more highly rated commercial mortgage-backed securities. David Hamamoto, ceo, said the New York-based specialty finance company, which recently completed its seventh collateralized debt obligation, no longer invests in bonds that have a rating lower than BBB. Although decision was partly influenced by looser underwriting standards, the change will not have a dramatic impact on the firm's activity because it buys mostly seasoned bonds.

The company also is planning to invest significant capital into its new joint venture with Chain Bridge Capital. The partners have formed Wakefield Capital to acquire and finance properties in the senior housing and healthcare-related sector. Chain Bridge's $64 million portfolio was acquired by the new entity. The portfolio consists of 13 net-leased properties and several first mortgages on senior housing assets.

Northstar is the only CRE CDO issuer to have its CDOs upgraded by a rating agency, Hamamoto said. Indeed, nine classes of two of its CDOs have been upgraded by Standard & Poor's. The company's seventh CDO, a $550 million deal, was priced at LIBOR plus 49 basis points, its best pricing to date.