SOURCE: Omega Commercial Finance Corp.

February 25, 2008 09:36 ET

Omega Executes Investment Agreement for $20,000,000 "Equity Line of Credit" With Investment Banker

MIAMI, FL--(Marketwire - February 25, 2008) - Omega Commercial Finance Corp. (OTCBB: OCFN), an integrated commercial real estate finance holding company, through its legal counsel, has filed an S-1 to register 4,829,654 free trading stocks with their investment banker to implement a $20 million "Equity Line of Credit" to supplement a Warehouse Credit Facility. Upon the approval of the Securities and Exchange Commission, Omega will have access to this line to convert into cash anytime over the next 36 months.

This is a tremendous opportunity to invest with Omega in the beginning stages of implementing their High/Yield Debt Financing Programs; plus they do not finance residential loan originations. Moreover, investors have a chance to diversify into an established company that can build a portfolio of loans not tainted by the Sub-Prime misfortune. "What Traditional Banks Consider Risk; We Consider Opportunities" is Omega's slogan... and they will benefit from distressed commercial real estate Borrowers located throughout the United States and international markets seeking immediate financing or refinancing. Omega will focus their lending programs in major metropolitan areas, where traditional banks and Wall Street firms are turning quantity Borrowers away, due to their self-imposed credit crutch.

Omega has designed their programs to achieve net yields in the mid 20 percent range with the use of prudent leverage. They will maintain their conservative underwriting policy of originating mostly senior financing positions, with an average loan-to-value ratio of 75%. Additionally, with the use of their investment banker's $20,000,000 ("Equity Line of Credit") i.e. cash, they can arrange High/Yield Financing Programs up to $300 million with a separated credit facility that is being prearranged. Omega once again will take advantage of commercial real estate Borrowers that traditional financing is not available currently, yet maintaining a low risk profile with their proverbial high yielding rates. Omega will seek to originate mostly senior mortgage loans for property types such as multifamily, office, retail, and industrial properties; and a much small percentage of riskier, less secured B-notes and mezzanine positions. Omega will be lending either to Borrowers with whom they have a prior relationship, or to Borrowers referred to them by sources known to Omega. An additional mechanism to ensure their quality underwriting practice, Omega will "piggyback" their underwriting around their credit facility Sponsorship, which is a proven finance lender-to-lenders, trading on New York Stock Exchange with a market capitalization of $3.4 billion.

THE HIGHLIGHTS OF HIGH/YIELD DEBT FINANCING PROGRAM

--  Omega's financing programs are forecasted to achieve above average
    returns by the arbitrage of its Sponsor's capital and their interest earned
    on their originated High/Yield loans.  Their warehouse line will be a Prime
    base rate that enables them to receive up to a 90% Advance Rate on some
    loans, with an average Advance Rate of 75%.  Omega in turn, will lend the
    money out with an average seven (7) percent over their cost; in addition to
    the Spread, Omega charges a minimum five (5) point Origination Fee and at
    least a four (4) point Exit Fee, and in some cases Equity Water that allows
    Omega to participate in the Borrower's net profits. Omega also charges a
    $25,000 Processing Fee to cover all preliminary due diligence, and to
    ensure these Borrowers do not walk away prior to a closing they charge a
    Lock-Up Payment  from $75,000 to $150,000, which assures no preliminary
    origination cost will be bearded by Omega.
    

Another strong building block of Omega is that they have structured its public ownership to maintaining the majority of the outstanding stock, which could give Omega the capability to distribute dividends to shareholders, yet sustaining their growth orientated strategy. For example, based on their 12 month forecast with the use of their current deals available for the Credit Facility and their prudent employment of leverage, will allow Omega to anticipate payment interest and fees revenues in the first year. Consequently, distributing the profits as dividend payments to share holders consisting of less than 10% the outstanding/free trading shares, and based on this thinly traded float; still leaving majority of anticipated profits to be allocated to Retained Earnings for future non leverage employment of capital with even higher yields in the mid 40s.

In sum, Omega is a growth oriented company through its careful capital structuring and practical use of leverage. This could give Omega the means to immediately share future profits with shareholders, yet sustaining stock appreciation by reinvesting in the company's business model for its long-term success through a well balanced High/Yield Debt Commercial Real Estate Portfolio.

Safe Harbor Statement: The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain of the statements contained herein, which are not historical facts, are forward-looking statements with respect to events, the occurrence of which involve risks and uncertainties. These forward-looking statements may be impacted, either positively or negatively, by various factors. Information concerning potential factors that could affect the Company is detailed from time to time in the Company's reports filed with the Securities and Exchange Commission.

Contact Information

  • Contact:
    Omega Commercial Finance Corp.
    (305) 677-0306