RAIT Financial Trust Announces $100 Million Capital Commitment

RAIT Financial Trust Announces $100 Million Capital Commitment from Almanac Realty Investors

PHILADELPHIA–(BUSINESS WIRE) - RAIT Financial Trust (NYSE: RAS) ("RAIT") today announced that ARS VI Investor I, LLC (the "Investor"), an affiliate of Almanac Realty Investors, LLC ("Almanac"), has committed to invest $100 million in RAIT. The capital will be utilized to fund RAIT's expanding loan origination and investment activities, including CMBS and bridge lending. The first $20 million of this commitment is expected to be funded on October 17, 2012. In connection with the funding, RAIT's Board of Trustees (the "Board") will appoint Andrew M. Silberstein, a partner of Almanac, to join the Board.

Scott Schaeffer, RAIT's Chairman and CEO, said, "We are pleased to announce this $100 million commitment from Almanac. We are seeing excellent lending opportunities and it's time to once again grow our loan portfolio by utilizing our core commercial real estate lending platform which has been in place since RAIT was founded in 1997. Almanac's commitment is indicative of the strength in our platform and provides RAIT with an efficient means to access capital to support our growth initiatives. We are very focused on investing in RAIT's traditional commercial real estate lending business and we expect to deploy this capital into investments that will be accretive to both earnings and dividends."

Andrew M. Silberstein, a partner of Almanac, said, "We are excited about the opportunity to invest in RAIT and this investment signals our confidence in the RAIT management team's ability to deploy this capital. RAIT is a seasoned commercial real estate lender, a market leader, and we look forward to seeing RAIT use this capital to expand its depth and reach in the market."

Investment Summary
$100 million investment to be drawn at RAIT's discretion, subject to customary draw down conditions, from time to time over the next two years for a combination of RAIT securities including the following:

• 4.0 million Series D Cumulative Redeemable Preferred Shares (the "Series D Preferred Shares") bearing a cash coupon rate initially of 7.5% and increasing at regular intervals thereafter. Ranks on parity with RAIT's existing outstanding preferred shares. Liquidation preference equal to $26.25 per share for five years and $25.00 per share thereafter.
• The Series D Preferred Shares will be issued in combination with warrants (the "Warrants") exercisable for, in the aggregate, up to 9,931,000 of RAIT's common shares (the "Common Shares") for an exercise price of $6.00 per Common Share, in each case subject to adjustment.
• The Series D Preferred Shares will also be issued in combination with Common Shares appreciation rights ("SARs") with respect to, in the aggregate, up to 6,735,667 Common Shares for an exercise price of $6.00 per Common Share, in each case subject to adjustment. Any SARs exercise may be settled by RAIT with cash or by issuing a note. RAIT will not issue any Common Shares upon exercise of the SARs. Use of proceeds: to fund RAIT's loan origination and investment activities, including CMBS and bridge lending.
• The Investor will have the right to designate one member of the Board following the first funding of $20 million, expected on October 17, 2012, and for so long as it maintains a minimum ownership in RAIT's securities. Mr. Silberstein will serve as this designee.