Lument Finance Trust Closes $664 Million Commercial Real Estate CLO

Rhea-AI Summary

Lument Finance Trust (NYSE: LFT) closed LMNT 2025-FL3, a $663.8 million managed commercial real estate CLO on Dec 10, 2025, placing approximately $585.0 million of investment-grade securities with institutional investors.

The transaction provides LFT with non-recourse, non-mark-to-market term financing, includes a 30-month reinvestment period, an 88.1% advance rate, and a weighted average interest at issuance of Term SOFR +1.91% before transaction costs. Initial collateral: 32 first-lien floating-rate loans secured by 49 U.S. multifamily and commercial properties; weighted average collateral spread ~321 bps over one-month SOFR. J.P. Morgan acted as sole structuring agent and bookrunner; Citizens JMP acted as co-manager.

Positive

• Placed $585.0 million of investment-grade securities
• Non-recourse term financing reduces direct asset liability exposure
• High advance rate 88.1% increases available funding capacity
• Weighted average collateral spread ~321 bps over one-month SOFR

Negative

• 30-month reinvestment period extends financing lifecycle and exposure
• Portion of collateral acquired from an affiliate of the external manager

Key Figures

CLO size $663.8 million LMNT 2025-FL3 managed CRE CLO issuance

Securities placed $585.0 million Investment grade securities sold to institutional investors

Advance rate 88.1% Advance rate on LMNT 2025-FL3 structure

Weighted avg interest Term SOFR + 1.91% Weighted average rate at issuance, before transaction costs

Reinvestment period 30 months Reinvestment period for LMNT 2025-FL3 collateral

Loans in pool 32 loans First lien floating rate mortgage loans and participations

Properties securing loans 49 properties Multifamily and commercial properties across the United States

Collateral spread 321 basis points over 1M SOFR Weighted average collateral spread for initial pool

Market Reality Check

$1.44 Last Close

Volume Volume 232,280 vs 20-day average 216,531 (relative volume 1.07x) shows only modest pickup ahead of this news. normal

Technical Shares at $1.44 trade below the $2.23 200-day MA and sit 49.3% under the 52-week high, only 2.49% above the 52-week low.

Peers on Argus

LFT was down 4.08% pre-release while peers were mixed: GPMT (-2.15%), ACR (-0.68%), CHMI (+0.40%), SEVN (+2.41%), SUNS (+3.79%). Moves were not uniformly directional, pointing to stock-specific factors rather than a broad REIT-mortgage shift.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 21	CLO pricing	Positive	-0.7%	Announced pricing of <b>$663.8M</b> LMNT 2025-FL3 CRE CLO with term financing.
Nov 12	Q3 2025 earnings	Negative	-3.3%	Reported Q3 2025 GAAP net income of <b>$0.7M</b> and lower distributable earnings.
Nov 07	Earnings call notice	Neutral	+2.0%	Set dates for filing Q3 10-Q and hosting an investor conference call.
Sep 16	Dividend declaration	Neutral	-5.7%	Declared Q3 2025 common dividend of <b>$0.04</b> and preferred dividend of <b>$0.4921875</b>.
Aug 08	Q2 2025 earnings	Positive	-9.1%	Announced Q2 2025 GAAP net income of <b>$2.5M</b> and distributable earnings of <b>$2.8M</b>.

Pattern Detected

Across the last five announcements, LFT often saw negative or muted price reactions even around operational or financing updates, with more down moves than up regardless of event type.

Recent Company History

Over the past six months, LFT reported Q2 and Q3 2025 results, declared a Q3 2025 common dividend of $0.04 per share, and communicated multiple CLO-related and investor-call updates. The November LMNT 2025-FL3 pricing release preceded this closing announcement and drew a slightly negative reaction. Earnings headlines, including smaller Q3 net income versus the prior year and a shrinking loan book, also coincided with negative moves, framing today’s CLO closing within a tougher CRE backdrop.

Market Pulse Summary

The stock is up +7.0% following this news. A strong positive reaction aligns with the sizable $663.8 million CRE CLO closing, which delivered about $585.0 million of term, non-recourse financing and an 88.1% advance rate. Historically, LFT’s news-driven moves have often been mixed, with several prior announcements followed by declines, so any sharp upside could face profit-taking. Investors might watch future credit performance of the 32 loans and funding costs when assessing durability.

Key Terms

commercial real estate collateralized loan obligation financial

"a $663.8 million managed Commercial Real Estate Collateralized Loan Obligation"

A commercial real estate collateralized loan obligation is a financial product that pools many loans made to office buildings, shopping centers, apartments and other commercial properties, then sells pieces of that pool to investors with different levels of risk and return — think of a large bundle of mortgages cut into slices. It matters to investors because it offers a way to gain exposure to commercial property income while spreading risk across many loans; however, its value depends on how well the underlying properties perform and whether borrowers keep paying, so downturns in property markets, rising vacancies or higher interest rates can reduce payments and hit the riskiest slices first.

cre clo financial

"a $663.8 million managed Commercial Real Estate Collateralized Loan Obligation ("CRE CLO")"

A CRE CLO is a type of investment vehicle that pools many loans made to commercial real estate projects (like office buildings, shopping centers, or apartment complexes) and repackages them into slices that investors can buy. Think of it as a mortgage bundle for commercial property where each slice carries different levels of risk and return; it matters to investors because its performance depends on property values and loan repayments, affecting income and potential losses.

term sofr financial

"weighted average interest rate at issuance of Term SOFR plus 1.91%"

Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.

basis points financial

"The weighted average collateral spread was approximately 321 basis points over one-month SOFR."

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

first lien financial

"32 first lien floating rate mortgage loans and participations secured by 49"

A first lien is a legal claim that gives a lender the top priority to be repaid from specific collateral if a borrower defaults or liquidates assets. Think of it as being first in line for the proceeds from a sale—investors who hold a first lien are more likely to recover their money than holders of later claims, so these loans generally carry lower risk and different pricing compared with unsecured or subordinated debt.

floating rate financial

"32 first lien floating rate mortgage loans and participations secured by 49"

An interest rate on a loan, bond or deposit that is not fixed but resets at regular intervals based on a reference market rate plus a set margin, so the payments rise or fall as overall interest rates change. For investors, floating-rate instruments act like a weather vane: they can protect income when rates climb by increasing payouts, but they introduce unpredictable cash flow and price movement when rates fall or shift, affecting expected yield and valuation.

AI-generated analysis. Not financial advice.

NEW YORK, Dec. 10, 2025 /PRNewswire/ -- Lument Finance Trust, Inc. (NYSE: LFT) ("we,"; "LFT" or the "Company") today announced that it closed LMNT 2025-FL3, a $663.8 million managed Commercial Real Estate Collateralized Loan Obligation ("CRE CLO"). The Company placed approximately $585.0 million of investment grade securities with institutional investors, providing LFT with term financing on a non-mark-to-market, non-recourse basis. LMNT 2025-FL3 includes a 30-month reinvestment period, an advance rate of 88.1%, and a weighted average interest rate at issuance of Term SOFR plus 1.91%, before transaction costs. 

The initial collateral pool consists of 32 first lien floating rate mortgage loans and participations secured by 49 multifamily and commercial real estate properties located across the United States. A portion of the collateral was owned by LFT prior to the closing of LMNT 2025-FL3 and the remaining collateral was acquired by the Company from an affiliate of Lument Investment Management, LLC, the Company's external manager, at par plus accrued interest. The weighted average collateral spread was approximately 321 basis points over one-month SOFR.

J.P. Morgan Securities LLC acted as sole structuring agent, lead manager and sole bookrunner for LMNT 2025-FL3. Citizens JMP Securities, LLC, acted as co-manager.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities or any other securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About LFT
LFT is a Maryland corporation focused on investing in, and financing and managing, a portfolio of commercial real estate debt investments. The Company primarily invests in transitional floating rate commercial mortgage loans with an emphasis on middle-market multi-family assets. LFT is externally managed and advised by Lument Investment Management, LLC, a Delaware limited liability company.

Additional Information and Where to Find It
Investors, security holders and other interested persons may find additional information regarding the Company at the SEC's Internet site at https://www.sec.gov/, the Company website at https://lumentfinancetrust.com, or by directing requests to: Lument Finance Trust, 230 Park Avenue, 20th Floor, New York, NY 10169, Attention: Investor Relations.

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SOURCE Lument Finance Trust, Inc.

FAQ

What amount did Lument Finance Trust (LFT) raise with LMNT 2025-FL3 on Dec 10, 2025?

LFT closed LMNT 2025-FL3 sized at $663.8 million and placed about $585.0 million of investment-grade securities.

What are the key financing terms for LFT's LMNT 2025-FL3 CLO (LFT)?

Key terms: 30-month reinvestment period, 88.1% advance rate, and weighted average interest at issuance of Term SOFR +1.91% before costs.

What collateral backs LFT's LMNT 2025-FL3 CLO (LFT)?

Initial collateral includes 32 first-lien floating-rate mortgage loans secured by 49 U.S. multifamily and commercial properties.

How does the LMNT 2025-FL3 transaction affect LFT's funding structure?

The CLO provides LFT with term, non-recourse financing and places investment-grade tranches with institutional investors, increasing secured funding.

Who arranged Lument Finance Trust's LMNT 2025-FL3 CLO (LFT)?

J.P. Morgan Securities acted as sole structuring agent, lead manager and sole bookrunner; Citizens JMP Securities acted as co-manager.

What was the weighted average collateral spread for LMNT 2025-FL3 (LFT)?

The weighted average collateral spread was approximately 321 basis points over one-month SOFR.