TPG RE Finance Trust Inc (TRTX) 2023 Q3 法說會逐字稿

Good morning, and welcome to the TPG Real Estate Finance Trust Third Quarter 2023 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Deborah Ginsberg, General Counsel, Vice President and Secretary. Please go ahead.

早安，歡迎參加 TPG 房地產金融信託 2023 年第三季財報電話會議。 （操作員說明）請注意此事件正在被記錄。我現在將會議交給總法律顧問、副總裁兼秘書黛博拉金斯堡 (Deborah Ginsberg)。請繼續。

Thanks, Steven. Good morning, and thank you for joining us. Welcome to TPG Real Estate Finance Trust Conference Call for the Third Quarter of 2023. I'm joined today by Doug Bouquard, Chief Executive Officer; and Bob Foley, Chief Financial Officer. Doug and Bob will share some comments about the quarter, and then we'll open up the call for questions.

謝謝，史蒂文。早安，感謝您加入我們。歡迎參加 2023 年第三季 TPG 房地產金融信託電話會議。今天，執行長 Doug Bouquard 也加入了我的行列。和財務長鮑勃‧弗利 (Bob Foley)。道格和鮑勃將分享一些有關本季度的評論，然後我們將開始提問。

Yesterday evening, we filed our Form 10-Q and issued a press release and earnings supplemental with a presentation of our operating results, all of which are available on our website in the Investor Relations section. I'd like to remind everyone that today's call may include forward-looking statements, which are uncertain and outside of the company's control. Actual results may differ materially. For a discussion of some of the risks that could affect results, please see the Risk Factors section of our 10-Q and 10-K. We do not undertake any duty to update these statements, and we will also refer to certain non-GAAP measures on this call. And for reconciliations, you should refer to the press release and our 10-Q. With that, I turn the call over to Doug Bouquard, Chief Executive Officer of TPG Real Estate Finance Trust.

昨天晚上，我們提交了 10-Q 表格，並發布了新聞稿和收益補充資料，其中介紹了我們的經營業績，所有這些都可以在我們網站的投資者關係部分找到。我想提醒大家，今天的電話會議可能包含前瞻性陳述，這些陳述是不確定的，超出了公司的控制範圍。實際結果可能存在重大差異。有關可能影響結果的一些風險的討論，請參閱 10-Q 和 10-K 的風險因素部分。我們不承擔更新這些聲明的任何責任，我們還將在本次電話會議上參考某些非公認會計準則措施。對於調節，您應該參考新聞稿和我們的 10-Q。說完，我將電話轉給 TPG 房地產金融信託公司執行長 Doug Bouquard。

Thank you, Deborah. Good morning, and thank you for joining our call. Over the past quarter, risk sentiment in the broader market has demonstrably shifted to the negative. The S&P 500 sold off nearly 10%. The 10-year treasury yield hit an all-time high since 2007 of over 5%, and the Fed has remained steadfast in its restrictive policies to slow the economy. Despite the Fed's policy, the labor market has remained resilient. The consumer continues to spend and the U.S. economy thus far has avoided a recession. Within the commercial real estate market, the move higher in interest rates and weakening risk sentiment has exacerbated many of the same headwinds facing the real estate sector earlier this year. Values are under further pressure, liquidity is constrained and transaction volumes remain low.

謝謝你，黛博拉。早安，感謝您加入我們的通話。過去一個季度，大市場的風險情緒明顯轉向負面。標普 500 指數下跌近 10%。 10年期公債殖利率創下2007年以來的歷史新高，超過5%，而聯準會仍堅定不移地實施限制性政策以減緩經濟成長。儘管聯準會採取了政策，勞動市場仍保持彈性。消費者繼續消費，美國經濟迄今避免了衰退。在商業房地產市場內，利率上升和風險情緒減弱加劇了今年稍早房地產行業面臨的許多相同的阻力。價值面臨進一步壓力，流動性受到限制，交易量仍然很低。

Furthermore, the secular challenges within the office space continue to grow as fresh equity and debt capital continues to avoid this property sector. Given the market backdrop, our posture and strategic position remains consistent with prior quarters. We maintain elevated levels of liquidity. We are patient on capital deployment, and we are proactively addressing credit-challenged assets across our balance sheet. Fortunately, it is challenging investment in climates like this where the depth and breadth of TPG's real estate investment platform truly shines. With over $20 billion of AUM across equity and debt strategies, we have valuable insights and perspectives that help drive our investment decisions.

此外，隨著新股本和債務資本繼續避開該房地產行業，辦公空間內的長期挑戰繼續增加。鑑於市場背景，我們的姿態和策略定位與前幾季保持一致。我們維持較高的流動性水準。我們對資本配置保持耐心，並積極解決資產負債表中存在信用問題的資產。幸運的是，在這樣的環境下進行投資充滿挑戰，而TPG 房地產投資平台的深度和廣度真正大放異彩。我們的股票和債務策略資產管理規模超過 200 億美元，擁有寶貴的見解和觀點，有助於推動我們的投資決策。

Over the past quarter, our decline in net income was driven predominantly by the sale of 2 office assets, one of which we mentioned last quarter as a subsequent event. As we continue to reduce our exposure to the office market, these 2 sales reduced our exposure to a borrower experiencing significant operational and liquidity issues and reflected our belief that selling the loan now maximized value for shareholders. In contrast to those loan sales, we also extended 2 office loans where, in each case, the borrower has shown clear commitment to both executing their business plan and have contributed significant fresh equity to the property over the past year. These resolutions are consistent with our strategy to resolve credit challenged assets, whether through loan restructuring, owning a property via REO or a loan sale, we remain incredibly focused on maximizing shareholder value with a keen eye on the long-term growth of the company.

在過去的一個季度中，我們淨利潤的下降主要是由於出售兩處辦公資產所致，其中我們在上個季度提到了其中一項後續事件。隨著我們繼續減少對辦公大樓市場的敞口，這兩次銷售減少了我們對遇到重大營運和流動性問題的借款人的敞口，並反映了我們的信念，即出售貸款現在可以為股東帶來最大價值。與這些貸款銷售相反，我們還提供了兩筆辦公大樓貸款，在每筆貸款中，借款人都明確承諾執行其業務計劃，並在過去一年中為該物業貢獻了大量新股本。這些決議與我們解決信貸問題資產的策略一致，無論是透過貸款重組、透過 REO 擁有房產還是貸款出售，我們仍然非常專注於股東價值最大化，並密切關注公司的長期成長。

Over the past quarter, we received repayments totaling $297 million across multifamily, hotel and office exposure. We funded one $44 million loan, a 63 LTV hotel loan at a spread of SOFR plus 4.55%. Our investment pace remained slow by choice, but we remained excited about future prospects for the real estate lending opportunity set. Elevated interest rates, widening credit spreads and substantial pullback in lending appetite across the market, particularly by regional banks, will benefit TRTX over the long term. As a sign of the progress we continue to make, over the past quarter, we had a 42% reduction in nonaccrual loans on our balance sheet, a modest reduction in our CECL reserve and further progress on our office exposure. While our CECL reserve is elevated, we have a consistent record of resolving credit-challenged assets substantially in line with our reserves.

過去一個季度，我們在多戶住宅、飯店和辦公室領域收到了總計 2.97 億美元的還款。我們資助了一筆 4,400 萬美元的貸款，一筆 63 LTV 的飯店貸款，利差為 SOFR 加 4.55%。我們選擇保持緩慢的投資步伐，但我們仍然對房地產貸款機會集的未來前景感到興奮。利率上升、信貸利差擴大以及整個市場（尤其是區域性銀行）貸款意願大幅回落，將從長遠來看使 TRTX 受益。作為我們不斷取得進展的一個標誌，在過去的一個季度，我們的資產負債表上的非應計貸款減少了42%，我們的CECL 準備金略有減少，我們的辦公室風險敞口也取得了進一步的進展。雖然我們的 CECL 準備金有所增加，但我們在解決信貸問題資產方面一直保持著與我們的準備金基本一致的記錄。

To put a finer point on office, over the past 18 months, we have reduced our office exposure by nearly $1.2 billion or approximately 53% in terms of principal balance. And we strongly believe that addressing office exposure is something to be done now, not in the coming years with a hope that interest rates will drop and the work-from-home trend will return to pre-Covid levels. We are addressing the secular issue head on, and we have executed this plan through a diversity of resolution strategies. Full principal payoffs, partial principal paydowns, loan modifications, loan sales in certain cases, take an ownership of assets if we determine that to be the value-maximizing path. To be very clear, we will continue to use every asset management tool at TPG's disposal to maximize shareholder value. I'm pleased to report we've executed this strategy while maintaining ample liquidity.

更準確地說，在過去 18 個月裡，我們的辦公室風險敞口減少了近 12 億美元，以本金餘額計算約減少了 53%。我們堅信，解決辦公室風險問題是現在就要做的事情，而不是在未來幾年內希望利率下降、在家工作趨勢恢復到新冠疫情爆發前的水平。我們正在正面解決世俗問題，並透過多種解決策略執行了這項計劃。如果我們確定這是價值最大化的路徑，則全額本金償還、部分本金償還、貸款修改、在某些情況下的貸款出售將獲得資產所有權。需要明確的是，我們將繼續利用 TPG 掌握的所有資產管理工具來實現股東價值最大化。我很高興地報告，我們在保持充足流動性的同時執行了這項策略。

This quarter, we ended with $571 million of liquidity comprised of $302 million of cash and $238 million of reinvestment capacity within our CRE CLOs. We are acutely aware that our liquidity posture weighs on the earnings power of the company in the short term, we believe this is prudent from a risk management perspective and will benefit the company in the long term. Furthermore, as we were an early mover to acknowledge the paradigm shift afoot in the real estate market, particularly within office, we are confident that the investment decisions we have made over the past year will enable our company to take full advantage of the attractive real estate credit environment over the long term.

本季末，我們的流動資金為 5.71 億美元，其中包括 3.02 億美元的現金和 CRE CLO 內 2.38 億美元的再投資能力。我們敏銳地意識到，我們的流動性狀況會在短期內影響公司的獲利能力，我們認為從風險管理的角度來看，這是審慎的做法，並且從長遠來看將有利於公司。此外，由於我們是較早認識到房地產市場（尤其是辦公室市場）正在發生範式轉變的先行者，因此我們相信，我們在過去一年中做出的投資決策將使我們的公司能夠充分利用有吸引力的房地產市場。長期的房地產信貸環境。

With that, I will turn the call over to Bob to discuss our financial results in greater detail.

接下來，我會將電話轉給鮑勃，更詳細地討論我們的財務表現。

Thanks, Doug. Good morning, everyone, and thank you for joining us. Regarding operating results, GAAP net loss to common shareholders was $64.6 million for the third quarter compared to $72.7 million for the second quarter. This largely reflects the sale of 2 nonperforming loans, which generated losses for GAAP purposes of $109.3 million and the conversion to REO of an apartment property in L.A., which generated a GAAP loss of $7.3 million. CECL reserves were previously established for all of these loans. Net interest margin for our loan portfolio was $19.5 million versus $26.1 million in the prior quarter, a decrease of $6.6 million or $0.08 per common share, due almost entirely to loan repayments during the third quarter, loan repayments in full, I should say, of $261.3 million and in the second quarter of $236 million.

謝謝，道格。大家早安，感謝您加入我們。就經營業績而言，第三季 GAAP 普通股股東淨虧損為 6,460 萬美元，而第二季為 7,270 萬美元。這主要反映了兩筆不良貸款的出售（按 GAAP 計算產生了 1.093 億美元的損失）以及將洛杉磯一處公寓物業轉換為 REO（按 GAAP 計算）產生了 730 萬美元的損失。 CECL 先前已為所有這些貸款設立了儲備金。我們貸款組合的淨利差為1,950 萬美元，而上一季為2,610 萬美元，減少了660 萬美元，即每股普通股0.08 美元，這幾乎完全是由於第三季度的貸款償還，我應該說，全額償還貸款2.613 億美元，第二季為 2.36 億美元。

Distributable earnings declined quarter-over-quarter to a loss of $103.7 million versus a loss of $14.4 million in the prior quarter due largely to the realized losses from the nonperforming loans and REO conversion Doug mentioned. Distributable earnings before realized credit losses was $13.7 million or $0.18 per share as compared to $19.1 million or $0.25 per share in the prior quarter.

可分配收益環比下降至虧損 1.037 億美元，而上一季為虧損 1,440 萬美元，這主要是由於 Doug 提到的不良貸款和 REO 轉換帶來的已實現損失。已實現信貸損失前的可分配收益為 1,370 萬美元，即每股 0.18 美元，而上一季為 1,910 萬美元，即每股 0.25 美元。

Nonperforming loans declined quarter-over-quarter by a full 42% to $318.1 million. 92% of our loan portfolio measured by UPB was performing at quarter end. If measured by net loan exposure, which is defined as UPB minus CECL reserves, 95% of our loan portfolio was performing at quarter end. Our CECL reserve decreased quarter-over-quarter by $41.7 million or 15% to $236.6 million from $278.3 million last quarter. Our CECL reserve rate declined to 560 basis points from 572 basis points. This decline in dollar terms and basis points reflects our team's progress in efficiently resolving credit challenged loans, recovering capital for investment and effective asset management of the remainder of our investment portfolio.

不良貸款環比下降了 42%，至 3.181 億美元。根據 UPB 衡量，我們的貸款組合中有 92% 在季度末表現良好。如果以淨貸款曝險（定義為 UPB 減去 CECL 準備金）來衡量，我們 95% 的貸款組合在季度末表現良好。我們的 CECL 儲備金環比減少 4,170 萬美元或 15%，從上季度的 2.783 億美元降至 2.366 億美元。我們的 CECL 準備率從 572 個基點下降至 560 個基點。美元計算和基點的下降反映了我們團隊在有效解決信用問題貸款、回收投資資本以及對我們投資組合的其餘部分進行有效資產管理方面取得的進展。

At quarter end, book value per share was $12.04, a decline of $1.06 from the second quarter due primarily to a dividend that exceeded pre credit loss earnings by $0.08 a share and additional CECL reserve related primarily to certain [Form 5] rated loans. Regarding liquidity, we maintained high levels of immediate and near-term liquidity, roughly 12.8% of total assets to support our asset resolution and loan investment strategies. Cash and near-term liquidity increased quarter-over-quarter by $27.7 million to $570.6 million, which was comprised of $302.3 million of balance sheet cash, $237.5 million of CLO reinvestment cash and $30.5 million of undrawn capacity under various secured credit agreements.

截至季末，每股帳面價值為12.04 美元，較第二季下降1.06 美元，主要是由於每股股息超過信貸損失前收益0.08 美元，以及主要與某些[表5] 評級貸款相關的額外CECL 準備金。在流動性方面，我們維持近期和近期流動性的高水平，約佔總資產的12.8%，以支持我們的資產處置和貸款投資策略。現金和短期流動性季增2,770 萬美元，達到5.706 億美元，其中包括3.023 億美元的資產負債表現金、2.375 億美元的CLO 再投資現金以及各種擔保信貸協議下的3050 萬美元的未提取產能。

Our third CLO remains open for reinvestment through the first quarter of 2024. During the quarter, we funded $21.4 million of commitments under existing loans. Unfunded commitments declined by $52.9 million or 17.6% to $247.6 million, which is only 5.9% of our total loan commitments. Regarding credit, we made substantial progress during the first 3 quarters of 2023 in properly resolving credit challenged loans for which we've concluded that a meaningful recovery in loan or collateral value is unlikely.

我們的第三份 CLO 在 2024 年第一季仍然開放再投資。本季度，我們根據現有貸款承諾提供了 2,140 萬美元的資金。無資金承諾減少 5,290 萬美元或 17.6%，至 2.476 億美元，僅占我們貸款承諾總額的 5.9%。在信貸方面，我們在 2023 年前 3 季在妥善解決信貸問題貸款方面取得了實質進展，我們得出的結論是，貸款或抵押品價值不太可能出現有意義的恢復。

Every resolution, whether an amendment, modification, loan sale, discounted payoff or REO conversion is evaluated using the same old versus cell reinvestment analysis. During the third quarter, we sold 2 nonperforming loans with an aggregate UPB of $281.6 million and incurred losses of $109.3 million. We repaid $197 million of related borrowings, thus reducing quarterly interest expense by approximately $4.1 million or $0.05 per share per quarter. Nonaccrual loans declined quarter-over-quarter by 42% to $318.1 million versus $546.7 million at June 30.

每項決議，無論是修正、修改、貸款出售、折扣支付或 REO 轉換，均使用相同的舊與單元再投資分析進行評估。第三季度，我們出售了 2 筆不良貸款，UPB 總額為 2.816 億美元，損失達 1.093 億美元。我們償還了 1.97 億美元的相關借款，從而減少了季度利息支出約 410 萬美元，即每季每股 0.05 美元。非應計貸款季減 42%，至 3.181 億美元，而 6 月 30 日為 5.467 億美元。

After quarter end, we sold one of those nonaccrual loans, an $86.7 million loan on an office building in Arlington, Virginia, just across the Potomac River from Washington, D.C. The results of those sales will be disclosed in next quarter's financial submissions. Risk ratings remained unchanged at 3.2 with limited migration between categories. In the third quarter, 2 loans were downgraded to 5 to 4 and 5 loans were repaid a resolve with a weighted average risk rating of 3.6.

季度末後，我們出售了其中一筆非應計貸款，即位於弗吉尼亞州阿靈頓一棟辦公大樓的8670 萬美元貸款，該辦公大樓與華盛頓特區隔波托馬克河相望。這些銷售的結果將在下個季度的財務報告中揭露。風險評等維持在 3.2 不變，類別之間的遷移有限。第三季度，有2筆貸款下調至5級至4級，5筆貸款得到了償還，加權平均風險評級為3.6。

Regarding CECL, our CECL reserve declined quarter-over-quarter by $41.7 million due to loan repayments, loan sales and 1 REO conversion, offset in part by increases in CECL reserves driven by worsening macroeconomic assumptions and further deterioration in the debt and equity capital markets, especially for office properties. Regarding our liabilities and capital base, non-mark-to-market liabilities remain the essential ingredient in our financing strategy. At quarter end, non-mark-to-market liabilities represented 68.9% of our liability base as compared to 71.7% at June 30.

關於CECL，由於貸款償還、貸款銷售和1 REO轉換，我們的CECL準備金環比下降了4170萬美元，但部分被宏觀經濟假設惡化以及債務和股權資本市場進一步惡化導致的CECL準備金增加所抵消，尤其是辦公物業。就我們的負債和資本基礎而言，非以市值計價的負債仍然是我們融資策略的重要組成部分。截至季末，非以市值計價的負債占我們負債基礎的 68.9%，而 6 月 30 日這一比例為 71.7%。

Leverage declined further to 2.6:1 from 2.79:1. During the quarter, we extended for 1 year, our $500 million secured financing arrangement with Goldman Sachs. We have executed the term sheet and are negotiating documents for another non-mark-to-market known on note arrangement with a new banking party. And when closed, it will be our third such arrangement in place. The market power of TPG's firm-wide capital markets business enables us to source and sustain long-dated cost-efficient debt capital to support our existing portfolio and selected loan purchases and originations.

槓桿率從2.79:1進一步下降至2.6:1。本季度，我們將與高盛 5 億美元的擔保融資安排延長了一年。我們已經簽署了條款清單，並正在與新的銀行方就另一項非按市值計價的票據安排文件進行談判。關閉後，這將是我們第三次進行此類安排。 TPG 全公司資本市場業務的市場力量使我們能夠獲取和維持長期且具有成本效益的債務資本，以支持我們現有的投資組合以及選定的貸款購買和發放。

At quarter end, we had $237.5 million of reinvestment capacity available in FL5 to refinance existing loans financed elsewhere on the balance sheet or to support new loan acquisitions or originations. We expect to promptly utilize this capacity during the fourth quarter, which we estimate will generate incremental interest income per quarter of roughly $0.07 per share. And with that, we'll open the floor for questions. Operator?

截至季末，我們在 FL5 中擁有 2.375 億美元的再投資能力，可為資產負債表上其他地方融資的現有貸款進行再融資，或支持新的貸款收購或發放。我們預計將在第四季度迅速利用這一產能，預計每季將產生約每股 0.07 美元的增量利息收入。接下來，我們將開始提問。操作員？

(Operator Instructions) Our first question comes from Stephen Laws with Raymond James.

（操作員說明）我們的第一個問題來自史蒂芬·勞斯和雷蒙德·詹姆斯。

Doug, I want to start with maybe a bigger picture around the 3-rated loans. Kind of when you think about a little over $3 billion, where do you think you are in identifying kind of things that may face future kind of negative rating migrations versus you're kind of already past what you guys believe is a stress point and you feel really good there. How do you think about that as a risk?

道格，我想先對三級貸款有一個更大的了解。當你考慮略高於 30 億美元的資金時，你認為你在識別未來可能面臨負面評級遷移的事情方面處於什麼位置，而不是你已經過了你們認為的壓力點，並且你那裡感覺真好。您如何看待這種風險？

Sure. So I think within our 3-rated loans, generally speaking, that's where we are -- first of all, have confidence that the borrower is executing on their business plan, first and foremost. Secondly, from an LTV perspective, we feel as though we have sufficient cushion in terms of today's values. And then I would say, third, we have a tremendous amount of insight as a function of the sort of broader TPG real estate investment platform around where valuation is today. So we, of course, have the benefit of those insights as we kind of think through risk ratings, generally speaking.

當然。所以我認為，一般來說，在我們的三級貸款中，這就是我們所處的位置——首先，我們對借款人正在執行其商業計劃充滿信心。其次，從LTV的角度來看，我們覺得就今天的價值觀而言，我們有足夠的緩衝。然後我想說，第三，作為更廣泛的 TPG 房地產投資平台的功能，我們擁有大量的洞察力，圍繞著今天的估值。因此，一般來說，當我們透過風險評級進行思考時，我們當然可以從這些見解中受益。

Great. And then, Bob, I think you mentioned two new 5-rated loans. Can you provide a little color on those?

偉大的。然後，鮑勃，我想您提到了兩筆新的 5 級貸款。你能為它們提供一些顏色嗎？

Sure. One is an office building on the West Coast, where the operator has experienced a decline in occupancy, which is not unique to this building. It's fairly market-wide in the Bay Area where return to office has been rather slow and underwhelming. And the other is a well-leased multifamily property in the West suburbs of Chicago. Both are instances that we've been tracking for a while, and we have asset resolution plans in place for each of those.

當然。其中之一是西海岸的一棟辦公大樓，營運商的入住率出現了下降，這並不是這棟大樓獨有的情況。在灣區，這種情況相當普遍，但重返辦公室的速度相當緩慢且平淡無奇。另一個是位於芝加哥西郊的一處出租良好的多戶住宅。我們已經追蹤這兩個實例一段時間了，我們為每個實例都制定了資產處置計劃。

Great. And then lastly, I wanted to touch on earnings and make sure I correct. The repayments of borrowings associated with loans sold would reduce interest expenses around $0.05. And then over the next quarter the full impact of the CLO replenishment. So kind of fair to say run rate distributable earnings or kind of excluding realized losses that will flow through depending on resolutions that we've sort of seen the trough here given those two dynamics?

偉大的。最後，我想談談收入並確保我的觀點是正確的。與出售貸款相關的借款償還將減少約 0.05 美元的利息支出。然後在下個季度，CLO 補充的全面影響。公平地說，運行率可分配收益或排除已實現的損失將取決於決議，考慮到這兩種動態，我們在這裡看到了低谷？

Well, never say never, but we do feel like we have fairly good visibility going forward on a number of things. One is that there are several levers that we have available to pull with respect to setting a new level or equilibrium for recurring earnings for the company. One of them, as you just mentioned, is reducing our nonperforming loan balance, where on the one side, we're not earning any interest income. And on the other side, we're paying every month interest expense on funding to maintain that loan position or those loan positions. Doug mentioned earlier, we cut that quarter-over-quarter by 42%.

好吧，永遠不要說永遠，但我們確實覺得我們在很多事情上都有相當好的前景。一是我們可以利用多種槓桿為公司的經常性收益設定新的水平或平衡。正如您剛才提到的，其中之一是減少我們的不良貸款餘額，一方面，我們沒有賺取任何利息收入。另一方面，我們每月支付資金利息費用，以維持該或這些貸款部位。道格之前提到，我們將季度環比削減了 42%。

So -- and in some instances, those positions are financed very cost effectively, for example, in certain of our CLOs and others, the cost of funds is a little bit higher. So the savings there can be quite substantial. We have $237.5 million of cash in FL5, as I mentioned, and we estimate that there's an upside note there of around $0.07. We have substantial liquidity on the balance sheet, which, as Doug described by choice, we have elected to date not to deploy, but employing that over the next couple of quarters if and when we conclude that's the right thing to do. It's really a 10% ROE-ish market today for making appropriate transitional first mortgage loans with strong sponsors. So that's considerable -- the meaningful upside there. And I mentioned in my remarks, the company is very low levered in comparison to all really of its public peers. And so there's an opportunity for upside there, too.

因此，在某些情況下，這些部位的融資成本非常有效，例如，在我們的某些 CLO 和其他產品中，資金成本稍高。因此，節省的費用可能相當可觀。正如我所提到的，我們在 FL5 擁有 2.375 億美元的現金，我們估計那裡的上漲空間約為 0.07 美元。我們的資產負債表上有大量的流動性，正如道格所選擇的那樣，我們選擇迄今為止不部署流動性，但如果我們認為這是正確的做法，就會在接下來的幾個季度使用它。如今，在擁有強大贊助商的情況下，提供適當的過渡性第一抵押貸款確實是一個淨資產回報率約為 10% 的市場。所以這是相當大的——這是有意義的好處。我在演講中提到，與所有上市同行相比，該公司的槓桿率非常低。因此，那裡也存在著上漲的機會。

Our next question is from Sarah Barcomb with BTIG.

我們的下一個問題來自 BTIG 的 Sarah Barcomb。

So you've been removing the more difficult credits from the portfolio via loan sales this year, and you've brought in a couple of new loans with the proceeds, but repayments have been strong as well. So the portfolio is contracting. Should we continue to assume that part of the dividend will be paid out of book value, given run rate earnings are shaking out a little bit below run rate DE or how should we think about that?

因此，今年您透過貸款銷售從投資組合中刪除了更困難的信貸，並用所得收益引入了幾筆新貸款，但還款也很強勁。因此，投資組合正在收縮。鑑於運行率收益略低於運行率 DE，我們是否應該繼續假設部分股息將從帳面價值中支付，或者我們應該如何考慮這一點？

I'd say consistent with prior quarters, the decision relating to the dividend is a board-level decision. And that decision, of course, will be a function of our view of the earnings power of the company as we work through credit challenged assets and then also the available investment opportunities going forward. But again, that's a board-level decision.

我想說，與前幾季一致，與股利相關的決定是董事會層級的決定。當然，這項決定將取決於我們對公司獲利能力的看法，因為我們在處理信貸挑戰資產時，以及未來可用的投資機會。但同樣，這是董事會層級的決定。

Okay. So my follow-up is with respect to the 5-rated loans. The specific CECL stayed about the same at $175 million. But the total principal balance of that group came down. So my question is, do the 2 loans that came into the 5-rated pool carry higher loss assumptions than the existing assets? Or did your outlook for those 3 -- 5-rated loans that were already in there last quarter worsened? How should we think about that dynamic across those 5 loans?

好的。所以我的後續行動是關於 5 級貸款的。具體的 CECL 基本上保持不變，為 1.75 億美元。但該集團的總本金餘額卻下降了。所以我的問題是，進入 5 級池的 2 筆貸款是否比現有資產有更高的損失假設？或者您對上個季度已有的 3 至 5 級貸款的前景是否惡化了？我們該如何看待這 5 筆貸款的動態？

Sarah, it's Bob. Happy to answer that question. You're correct, there were 2 loans that moved into 5. And so they effectively brought with them the allocated CECL reserve associated with each. There were a small number of loans that were already in the specifically identified pool, where we did slightly increased the reserves, primarily office and primarily the reasons that Doug commented on earlier. But relative to the removals, frankly, that resulted from the loan resolutions achieved during the quarter, they were relatively modest.

莎拉，是鮑伯。很高興回答這個問題。你是對的，有 2 筆貸款變成了 5 筆貸款。因此，他們實際上帶來了與每筆貸款相關的分配的 CECL 儲備金。有少量貸款已經在專門確定的池中，我們確實稍微增加了準備金，主要是辦公室，主要是道格之前評論的原因。但坦白說，相對於本季達成的貸款決議所導致的移除，它們相對溫和。

Our next question is from Rick Shane with JPMorgan.

我們的下一個問題來自摩根大通的 Rick Shane。

I need to queue in before Sarah because she really hit my primary topic in terms of dividend. But would love to explore this just a little bit more, obviously, with the realized losses that creates an opportunity to really rethink the dividend. But even if we just start to normalize for recurring spread income, it's unclear whether or not $0.24 is the right run rate. Can you talk about both the dynamic in terms of realized losses and also the ongoing spread income to support the dividend?

我需要排在莎拉之前，因為她確實觸及了我在股息方面的主要話題。但顯然，我很想進一步探討這一點，因為已實現的損失創造了一個真正重新考慮股息的機會。但即使我們剛開始使經常性利差收入正常化，也不清楚 0.24 美元是否是正確的運行利率。您能談談已實現損失的動態以及支持股息的持續利差收入嗎？

Sure. And happy to provide a little more context there. So just to reiterate some of the important components of that determination, which again is done at the Board level. But we look at current liquidity, our targeted liquidity levels, expectations on credit challenged loans and then ultimately, it comes down to a capital allocation decision. To put some numbers around it, Rick, to your question, net income before credit losses has really ranged between $0.18 to $0.25 per share. And we believe that this is an important precursor to establishing sustaining earnings power once we substantially complete our asset resolution strategy. I think as Bob had mentioned within his comments at the beginning of the call that just in deploying the capital within our CRE CLO, which again has a substantial amount of available reinvestment, that alone will add approximately $0.07 per share. So I think that metric, I think, is important as we really think about, again, establishing the sustainable earnings power of the balance sheet as we've worked through some of the credit challenged assets.

當然。並且很高興在那裡提供更多背景資訊。因此，我想重申該決定的一些重要組成部分，這也是在董事會層面完成的。但我們會考慮目前的流動性、我們的目標流動性水準、對信用挑戰貸款的預期，然後最終歸結為資本配置決策。瑞克，對於你的問題，用一些數字來說明，信用損失前的淨利潤實際上在每股 0.18 美元到 0.25 美元之間。我們相信，一旦我們基本上完成資產處置策略，這是建立持續獲利能力的重要先兆。我認為，正如鮑勃在電話會議開始時在評論中提到的那樣，僅在我們的 CRE CLO 中部署資本（再次擁有大量可用再投資），僅此一項就將增加每股約 0.07 美元。因此，我認為這個指標很重要，因為我們在處理一些信貸挑戰資產時，再次真正考慮建立資產負債表的可持續獲利能力。

Got it. And look, I understand the balancing act here and I appreciate that you guys had been forward-leaning in terms of building reserve transparency and resolving troubled loans, and we may be in an environment where first loss is best loss and it's a little bit painful to watch right now. But we look at the disconnect between book value per share and the -- where the stock is trading and a dividend policy that allows you, given the losses probably to retain more capital. Why not be a lot more aggressive on the buyback side at this point on the dividend side?

知道了。看，我理解這裡的平衡行為，我很欣賞你們在建立儲備透明度和解決問題貸款方面一直具有前瞻性，我們可能處於一個第一次損失就是最好的損失的環境，這有點痛苦現在就觀看。但我們著眼於每股帳面價值與股票交易地點之間的脫節，以及允許您在虧損的情況下保留更多資本的股利政策。此時此刻，為什麼不在股利方面更積極地回購股票？

Look, I think we're always looking at ways in terms of optimizing capital allocations. I think that our main focus over the past few quarters, as you know, has been really preserving liquidity, keeping our liquidity elevated has really allowed us to navigate credit challenge loans, frankly, and I think that's really been at the top of the list. I think as we work through our credit challenge loans, which, again, we've made a lot of progress, particularly this quarter, and I expect next quarter as well, we will always be thinking about what the appropriate capital allocation is in terms of cash in our balance sheet.

聽著，我認為我們一直在尋找優化資本配置的方法。我認為，正如您所知，我們在過去幾個季度的主要重點是真正保持流動性，坦白說，保持流動性較高確實使我們能夠應對信用挑戰貸款，我認為這確實是最重要的。我認為，當我們處理信用挑戰貸款時，我們再次取得了很大進展，特別是本季度，我預計下個季度也是如此，我們將始終考慮適當的資本配置我們的資產負債表中的現金。

Our next question is from Arren Cyganovich with Citi.

我們的下一個問題來自花旗銀行的 Arren Cyganovich。

I wanted to touch on credit migration trends and how they're moving about within the portfolio? Is this still kind of coming from loan maturities that are forcing the sponsors to make a choice? Or is there actual kind of deterioration within some of these individual underlying assets?

我想談談信貸遷移趨勢以及它們在投資組合中的變化？這是否仍然是由於貸款到期而迫使贊助商做出選擇？或者其中一些單獨的基礎資產確實存在惡化？

Thanks for your question. I think that migration is, as we said, it's been pretty stable. We review every loan every quarter. And Look, we've materially reduced office. We've got, by choice, a significant investment position in multifamily loans. And as I described earlier, the performance there against business plan has been quite good. Clearly, rent growth has slowed, but our entry point there, and frankly, the remaining mark-to-market in a lot of those positions is quite strong. So we just not -- we feel good about where we're "mark" in terms of risk ratings, situations change, but that's how we see it right now.

謝謝你的提問。我認為，正如我們所說，遷移非常穩定。我們每季審查每筆貸款。看，我們大幅減少了辦公室。我們選擇在多戶家庭貸款領域擁有重要的投資地位。正如我之前所描述的，相對於商業計劃的表現非常好。顯然，租金成長已經放緩，但我們的切入點是，坦白說，其中許多職位的剩餘按市價計算相當強勁。所以我們只是不——我們對我們在風險評級、情況變化方面的「標記」感到滿意，但這就是我們現在的看法。

Okay. And then in the fourth quarter, it looks like you have a few maturities, including a couple of 5s. Have you had any early indications on how those might play out in the quarter?

好的。然後在第四季度，看起來你有一些成熟度，包括幾個 5。您是否有任何關於這些在本季可能如何實施的早期跡象？

Well, yes, we're very proactive in terms of our asset management, and I think the resolutions over the last number of quarters reflect that. So we do have some loan maturities coming up in the fourth quarter, and we expect that we'll be employing all of the energies that Doug described earlier. We may see some extensions. We may see some resolutions in the form of sale or REO conversion, and we may see some repayments as well. And we'll be excited and pleased to report on all of that when we speak again. And I guess it will be February.

嗯，是的，我們在資產管理方面非常積極主動，我認為過去幾季的決議反映了這一點。因此，我們確實有一些貸款將在第四季度到期，我們預計我們將利用道格之前描述的所有精力。我們可能會看到一些擴充功能。我們可能會看到一些以出售或 REO 轉換形式出現的決議，也可能會看到一些還款。當我們再次發言時，我們將非常興奮和高興地報告所有這些。我猜那是二月。

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Doug Bouquard for closing remarks.

女士們、先生們，問答環節已經結束。我想將電話轉回給道格·布卡爾 (Doug Bouquard)，讓其致閉幕詞。

Thank you. Again, I just wanted to thank everyone for taking the time, and we look forward to keeping you update on our progress. Thank you very much.

謝謝。再次，我想感謝大家抽出寶貴的時間，我們期待向您通報我們的最新進展。非常感謝。

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.

今天的會議到此結束。感謝您的參與。此時您可以斷開線路。