TPG RE Finance Trust, Inc. Reports Operating Results for the Quarter and Full Year Ended December 31, 2022
21 Febbraio 2023 - 10:34PM
Business Wire
TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX” or the
“Company”) reported its operating results for the quarter and full
year ended December 31, 2022. Regarding fourth quarter results,
Doug Bouquard, Chief Executive Officer of TRTX, said: “We are
pleased with our results this quarter with increased net interest
margin over the prior quarter, a strong liquidity position and
positive asset management resolutions. Our early recognition of the
challenges facing the commercial real estate market resulted in
stable CECL reserves quarter over quarter, and we have confidence
that the strength of the entire TPG platform will enable us to
opportunistically lend into a more attractive market in 2023.”
FOURTH QUARTER 2022 ACTIVITY
- Recognized GAAP net income attributable to common stockholders
of $32.6 million, or $0.42 per common share (based on a basic and
diluted weighted average share count of 77.4 million common
shares), and book value per common share of $14.48 on December 31,
2022.
- Declared on December 9, 2022 a cash dividend of $0.24 per share
of common stock which was paid on January 25, 2023 to common
stockholders of record as of December 29, 2022. The Company paid on
December 30, 2022 to stockholders of record as of December 20, 2022
a quarterly dividend on its 6.25% Series C Cumulative Redeemable
Preferred Stock of $0.3906 per share.
- Originated one first mortgage loan with a total loan commitment
of $87.0 million, an initial unpaid principal balance of $59.0
million, an interest rate of Term SOFR plus 5.25%, an interest rate
floor of 2.50% and a loan-to-value ratio of 60.8%. Additionally,
funded $39.3 million of future funding obligations associated with
previously originated loans.
- During the three months ended December 31, 2022, sold an office
property at a price approximately equal to its carrying value of
$78.6 million after converting the loan to REO in the same
period.
- Received loan repayments of $336.5 million, including five full
loan repayments totaling $294.4 million, comprised of the following
property types: 64.3% hotel, 22.5% multifamily and 13.2%
office.
- Weighted average risk rating of the Company’s loan portfolio
was 3.2 as of December 31, 2022, unchanged from September 30,
2022.
- Carried at quarter-end an allowance for credit losses of $214.6
million, a decrease of $11.1 million from $225.6 million as of
September 30, 2022. Of the $214.6 million allowance for credit
losses, $84.5 million relates to the Company’s specific reserve.
The quarter-end allowance equals 395 basis points of total loan
commitments as of December 31, 2022 compared to 390 basis points as
of September 30, 2022.
- Ended the quarter with $590.9 million of total liquidity,
comprised of: $231.7 million of cash-on-hand available for
investment, net of $22.4 million held to satisfy liquidity
covenants under the Company’s secured financing agreements; undrawn
capacity under secured financing arrangements of $38.4 million;
undrawn capacity under asset-specific financing arrangements and
secured revolving credit facility of $1.3 million; and $297.2
million of reinvestment capacity in the Company’s CRE CLOs.
Additionally, the Company held unencumbered loan investments with
an aggregate unpaid principal balance of $5.6 million as of
December 31, 2022.
- Non-mark-to-market debt represented 73.5% of total borrowings
at December 31, 2022.
- Increased the capacity of the secured revolving credit facility
by $40.0 million to $290.0 million.
- Weighted average interest rate floor for loan investments was
85 basis points as of December 31, 2022, unchanged from September
30, 2022. The Company’s assets and liabilities are fully
rate-sensitive.
- Rate caps on substantially all of the Company’s loans had a
weighted average strike of 2.71% at December 31, 2022 as compared
to 2.87% at September 30, 2022.
FULL YEAR 2022 ACTIVITY
- Recognized GAAP net (loss) attributable to common stockholders
of ($73.6) million, or ($0.95) per common share, based on a basic
and diluted weighted average share count of 77.3 million common
shares.
- Declared cash dividends of $75.1 million, or $0.96 per common
share, representing a 14.1% annualized dividend yield based on the
December 30, 2022 closing price of $6.79, and a 6.6% annualized
dividend yield based on the December 31, 2022 book value per common
share of $14.48.
- Originated 18 and acquired at a discount 5 performing first
mortgage loans with total loan commitments of $1.7 billion, an
aggregate initial unpaid principal balance of $1.5 billion, a
weighted average interest rate of the applicable benchmark rate
plus 3.77%, a weighted average interest rate floor of 0.72% and a
weighted average loan-to-value ratio of 65.3%. Additionally, funded
$145.2 million of future funding obligations associated with
previously originated loans.
- Received loan repayments of $1.5 billion, including full loan
repayments of $1.3 billion on 21 loans, comprised primarily of the
following property types: 35.5% hotel and 34.3% office.
- Issued TRTX 2022-FL5, a $1.075 billion managed CRE CLO with
$907.0 million of investment-grade bonds outstanding, a two-year
reinvestment period, an advance rate of 84.4%, and a weighted
average interest rate at issuance of Compounded SOFR plus 2.02%,
before transaction costs.
- Redeemed $600.0 million of outstanding investment-grade bonds
associated with TRTX 2018-FL2. The 17 collateral interests with an
aggregate unpaid principal balance of $805.7 million financed
therein were refinanced by the issuance of TRTX 2022-FL5 and the
expansion of an existing secured credit agreement.
- Amortized $401.7 million of bonds associated with TRTX 2019-FL3
using proceeds from loan repayments.
- Closed a $250.0 million, secured revolving credit facility with
a syndicate of 5 banks to provide interim funding of up to 180 days
for newly-originated and existing loans, which was subsequently
increased to $290.0 million. The credit facility has a 3-year term
and an interest rate of Term SOFR plus 2.00%.
- Closed four separate non-mark-to-market asset-specific
financing arrangements with total commitments of $726.3 million and
an outstanding principal balance of $565.4 million, increasing
non-market-to-market financing to 73.5% from 70.4% as of December
31, 2021.
- Carried a CECL reserve of $214.6 million as of December 31,
2022, compared to $46.2 million as of December 31, 2021.
- Recognized credit loss expense of $173.0 million, or $2.23 per
basic and diluted common share.
SUBSEQUENT EVENTS
- Closed, or is in the process of closing, two first mortgage
loans with a total commitment amount of $123.8 million and initial
funding of $111.4 million. The first mortgage loans are secured by
a hotel and a portfolio of industrial properties.
- Received a repayment in-full of a first mortgage loan secured
by an office property with an aggregate loan commitment and unpaid
principal balance of $35.2 million and $30.4 million,
respectively.
The Company issued a supplemental presentation detailing its
fourth quarter and full year 2022 operating results, which can be
viewed at http://investors.tpgrefinance.com/.
CONFERENCE CALL AND WEBCAST INFORMATION
The Company will host a conference call and webcast to review
its financial results with investors and other interested parties
at 10:00 a.m. ET on Wednesday, February 22, 2023. To participate in
the conference call, callers from the United States and Canada
should dial +1 (877) 407-9716, and international callers should
dial +1 (201) 493-6779, ten minutes prior to the scheduled call
time. The webcast may also be accessed live by visiting the
Company’s investor relations website at
http://investors.tpgrefinance.com/event.
REPLAY INFORMATION
A replay of the conference call will be available after 1:00
p.m. ET on Wednesday, February 22, 2023 through 11:59 p.m. ET on
Wednesday, March 8, 2023. To access the replay, listeners may use
+1 (844) 512-2921 (domestic) or +1 (412) 317-6671 (international).
The passcode for the replay is 13734670. The replay will be
available on the Company’s website for one year after the call
date.
ABOUT TRTX
TPG RE Finance Trust, Inc. is a commercial real estate finance
company that originates, acquires, and manages primarily first
mortgage loans secured by institutional properties located in
primary and select secondary markets in the United States. The
Company is externally managed by TPG RE Finance Trust Management,
L.P., a part of TPG Real Estate, which is the real estate
investment platform of global alternative asset management firm TPG
Inc. (NASDAQ: TPG). For more information regarding TRTX, visit
https://www.tpgrefinance.com/.
FORWARD-LOOKING STATEMENTS
This earnings release contains “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements are subject to various
risks and uncertainties, including, without limitation, statements
relating to the performance of the investments of TPG RE Finance
Trust, Inc. (the “Company” or “TRTX”); global economic trends and
economic conditions, including heightened inflation, slower growth
or recession, changes to fiscal and monetary policy, higher
interest rates, labor shortages, currency fluctuations and
challenges in global supply chains; the Company's ability to
originate loans that are in the pipeline and under evaluation by
the Company; financing needs and arrangements; and the risks,
uncertainties and factors set forth under the heading “Risk
Factors” in the Company’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, as such risk factors may be updated
from time to time in the Company’s periodic filings with the
Securities and Exchange Commission (the “SEC”), which are
accessible on the SEC’s website at www.sec.gov. Forward-looking
statements are generally identifiable by use of forward-looking
terminology such as “may,” “will,” “should,” “potential,” “intend,”
“expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “believe,”
“could,” “project,” “predict,” “continue” or other similar words or
expressions. Forward-looking statements are based on certain
assumptions, discuss future expectations, describe existing or
future plans and strategies, contain projections of results of
operations, liquidity and/or financial condition or state other
forward-looking information. Statements, among others, relating to
the Company’s ability to generate future growth and deliver value
and returns, and the Company’s ability to provide effective
financing solutions for borrowers are forward-looking statements,
and the Company cannot assure you that TRTX will achieve such
results. The ability of TRTX to predict future events or conditions
or their impact or the actual effect of existing or future plans or
strategies is inherently uncertain. Although the Company believes
that such forward-looking statements are based on reasonable
assumptions, actual results and performance in the future could
differ materially from those set forth in or implied by such
forward-looking statements. You are cautioned not to place undue
reliance on these forward-looking statements, which reflect the
Company’s views only as of the date of this earnings release.
Except as required by law, neither the Company nor any other person
assumes responsibility for the accuracy and completeness of the
forward-looking statements appearing in this earnings release. The
Company does not undertake any obligation to update any
forward-looking statements contained in this earnings release as a
result of new information, future events or otherwise. Past
performance is not indicative nor a guarantee of future returns.
Yield data are shown for illustrative purposes only and have
limitations when used for comparison or for other purposes due to,
among other matters, volatility, credit or other factors.
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