Tpg Re Finance Trust, Inc. · NYSE:TRTX
Tpg Re Finance Trust — Bank of America Global Real Estate Conference 2021
43 slides from Tpg Re Finance Trust's conference presentation, Sep 21, 2021
Slide 1: TPG RE Finance Trust, Inc. Bank of America Global Real Estate Conference
September 21, 2021 TPG RE Finance Trust, Inc. Bank of America Global Real Estate Conference Exhibit 99.1
Slide 2: Forward-Looking Statements and Other Disclosures
Forward-Looking Statements and Other Disclosures The information contained in this presentation 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
Slide 3: Business Description
Business Description
Slide 4: TPG RE Finance Trust, Inc.
TPG RE Finance Trust, Inc. $5.3 billion Total Outstanding Loan Commitments $4.8 billion Unpaid Principal Balance of Loans Potential Loan Growth of $1.3 billion from Current Capital Base1 1. Refer to page 20 for additional detail 2. Refer to page 21 for additional detail Source: Company Records, as o
Slide 5: Platform Highlights
Platform Highlights Scale Balance sheet lender with $5.3B in floating rate loan commitments, of which 99.3% are first mortgage loans Originated and acquired $14B of loan commitments since December 2014 Harness TPG’s $108B AUM platform, informational and network advantages, and enhanced access to the
Slide 6: Momentum Drives Growth
Momentum Drives Growth Loan origination strategy: highly selective; experienced sponsors; target multifamily and life science assets in high-growth regions Closed 10 first mortgage loans during 1H 2021 with total commitments of $797.8M; property type concentrations are: multifamily 48%; office 47% (
Slide 7: Established, Proven CRE Lending Platform
Established, Proven CRE Lending Platform Sourcing Credit and Investing Capital Markets Operations / Control / Reporting Asset / Portfolio Management TPG infrastructure drives accounting, tax, compliance, financial reporting and investor reporting Integrated business within TPG Real Estate ($11B1 AUM
Slide 8: Career Credit Investors Drive Investment Strategy
Career Credit Investors Drive Investment Strategy Leadership team has invested through multiple business and real estate cycles Emphasis on credit quality and principal protection Constant engagement throughout the investment process Deep, extensive relationships with owners, borrowers, brokers and
Slide 9: Integration with TPG Drives Competitive Advantage
Integration with TPG Drives Competitive Advantage Experienced team with a long history of collaborative investing through numerous credit and macroeconomic cycles Established lending platform with strong capital markets capabilities and expansive financing relationships Long standing relationships w
Slide 10: TPG Commitment to Diversity, Equity & Inclusion
TPG Commitment to Diversity, Equity & Inclusion Use of our influence and capital to advance diversity and equality 100+ women directors added to 60 portfolio company boards since 2017 A+/A+ ratings in Strategy & Governance from Principles for Responsible Investment (PRI) 50% diverse representation i
Slide 11: Financial Performance
Financial Performance
Slide 12: 2Q 2021 Highlights
2Q 2021 Highlights Earnings Loan Portfolio Liquidity & Capitalization 1. Calculated on Net Income (Loss) Attributable to Common Stockholders; please refer to Appendix for reconciliation from GAAP Net Income (Loss) to Net Income (Loss) Attributable to Common Stockholders 2. Please refer to Appendix f
Slide 13: Operating Performance and Dividend Coverage
Bank of America Conference | Presentation | September 2021 Operating Performance and Dividend Coverage Operating Performance¹ ($ in millions) 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 Net Income (Loss) $32.4 $32.0 $14.6 $38.4 $42.9 ($232.8) $28.4 Net Income (Loss) Attributable to Common Stockholders ($21.0
Slide 14: Liquidity and Leverage
Liquidity and Leverage Available Liquidity Leverage Ratio 1. Cash held to satisfy minimum cash requirement under secured credit facility covenants 2. Represents (i) total outstanding borrowings under financing arrangements, net, including collateralized loan obligations, secured credit agreements, a
Slide 15: Book Value Walk 2Q 2021
Book Value Walk 2Q 2021 1. Per share amounts based on actual shares outstanding as of each period end. Does not reflect dilutive impact of 12M warrants held by an affiliate of Starwood Capital Group; Book value per share reflecting pro forma dilution resulting from an assumed exercise of warrants at
Slide 16: Loan Portfolio & Capitalization
Loan Portfolio & Capitalization
Slide 17: National, Major Market Footprint
National, Major Market Footprint1 Lending Focused in Top 25 Markets3 Top 25 Markets Account for 85.7% of Total Loan Commitments Loan Category Geographic Diversity Diversified Loan Portfolio Property Diversity1,2 1. By total loan commitment at June 30, 2021 2. See Appendix for definitions 3. Top 25 m
Slide 18: Select 2021 Loan Originations
Select 2021 Loan Originations Multifamily Office (Life Science) Multifamily $47.0M $215.0M $122.5M St. Petersburg, FL Bay Area, CA Towson, MD 211-unit multifamily building, 280-space covered parking garage and 7,500 SF of retail 384K SF, 9-story Class A office building and adjacent parking structure
Slide 19: 2021 Loan Originations Metrics
2021 Loan Originations Metrics 1H 2021 Investment Highlights1 Closed 10 first mortgage loans Total commitments of $797.8M Initial fundings of $634.5M Average loan size of $79.8M 100% floating rate Weighted average interest rate of L + 3.47% Weighted average LIBOR floor of 22 bps Weighted Average LTV
Slide 20: Capital Deployment
Bank of America Conference | Presentation | September 2021 Capital Deployment Maximum Potential Investment Capacity Full deployment of equity, targeting leverage of 3.75:1 Sell defaulted retail property loan and real estate owned asset at carrying value, releasing an estimated $70.4M of equity for r
Slide 21: Attractive Potential Total Return
Bank of America Conference | Presentation | September 2021 Attractive Potential Total Return Current market price to book value ratio of 0.79x TRTX offers attractive potential total return: 18% potential return if market price recovers to diluted book value 8% potential return based on annual divide
Slide 22: Favorable CRE Market Trends
Favorable CRE Market Trends Sale Transaction Volume Has Returned to Pre-COVID Levels1 Over $2.3 Trillion of CRE Mortgages are Scheduled to Mature Over the Next Five Years2 CRE Debt Lenders by Sector3 U.S. Sales Volume Commercial Mortgage Maturities by Sector Rising volumes of loan maturities and pro
Slide 23: Non-Mark to Market Liabilities
Non-Mark to Market Liabilities 1 1. Includes hotel specific facility which may be re-margined beginning after the facility’s 2nd anniversary date based on LTV test; otherwise, no credit or spread marks apply 1 Bank of America Conference | Presentation | September 2021 Competitor Liability Mix Compet
Slide 24: Loan Financing Overview
Loan Financing Overview 1. Omits the impact of LIBOR floors on approximately 6% of our financing 2. Based on extended maturity dates where ability to extend is at Company’s option 3. Reflects the extension in August 2021 of our $250 million secured credit facility with Goldman Sachs from August 19,
Slide 25: Interest Rate Sensitivity
Interest Rate Sensitivity Loan Portfolio Net Floating Rate Exposure $ Millions 100% of the loan portfolio is indexed to one-month USD LIBOR Loan portfolio benefits from low rates due to high in-place LIBOR floors on loans; weighted average LIBOR floor is 1.44% 84% of the loan portfolio is subject to
Slide 26: High Share of Non-Mark-to-Market Financing as Risk Mitigant
MTM Secured Credit Facilities 7% Financing by Property Type Office Hotel Multifamily Mixed-Use Non-MTM Collateralized Loan Obligations 64% MTM Secured Credit Facilities 36% Non-MTM Collateralized Loan Obligations 100%1 Non-MTM Secured Credit Facility2 38% Non-MTM Collateralized Loan Obligations 62%
Slide 27: Capital Structure Overview
Capital Structure Overview $50.0 (1%) $2,835.9 (55%) $694.1 (13%) $194.4 (4%) $1,242.8 (24%) Series C Preferred Stock Mortgage Loan Payable Collateralized Loan Obligations Secured Credit Agreements (MTM) Common Equity at Book Value ($ in millions) Maximum Capacity Maximum Capacity Maximum Capacity W
Slide 28: Preferred Stock Issuance and Redemption
Preferred Stock Issuance and Redemption Issuer TPG RE Finance Trust Inc. (“TRTX” or the “Company”) Security Series C Cumulative Redeemable Preferred Stock (“Series C Preferred”) Offering Size $201.25 million, including 15% overallotment option exercised by underwriters Liquidation Preference $25.00
Slide 29: Appendix
Appendix
Slide 30: Investment Approach and Process
Bank of America Conference | Presentation | September 2021 Investment Approach and Process David Bonderman Chairman Jim Coulter Executive Chairman Jon Winkelried CEO Jonathan Coslet CIO Jack Weingart CFO Ken Murphy COO, TRTX Investment Review Committee Bob Foley CFO Peter Smith CIO Deborah Ginsberg
Slide 31: Credit and Risk Management
Credit and Risk Management Investment performance enhanced by rigorous credit process and integrated portfolio management Senior management has an average of 25 years of credit and underwriting experience Bottom-up, equity-oriented approach to underwriting and due diligence focused on “all-weather”
Slide 32: Risk Ratings
Risk Ratings 1. See Appendix for a description of the Company’s Loan Risk Rating scale and definition of Loan Category 2. Includes a single sponsor relationship with common control of 4 loans with total amortized cost of $23.0 million 3. Includes an amendment and assumption of existing office loan;
Slide 33: 2Q21 Interest Collections
2Q21 Interest Collections Loan Performance PIK Interest TTM 99.3% interest collections during 2Q21, including PIK interest of 1.1% 1. Loan defaulted in 4Q20 2. Based on Portfolio UPB at June 30, 2021 3. See Appendix for definitions of Economic and Non-Economic Modifications 4. Includes the write-off
Slide 34: TRTX Loan Portfolio
TRTX Loan Portfolio Loan Name TRTX Loan Commitment1 TRTX Loan Balance2 Interest Rate Extended Maturity Location Property Type Commitment Per Sq. ft. / Unit LTV3 Loan 1 $300.8 $290.2 L+ 1.6% 3.2 years New York, NY Office $594 Sq. ft. 65.2% Loan 2 $223.0 $173.0 L+ 3.4% 3.1 years Brookhaven (Atlanta),
Slide 35: Per Share Calculations
Per Share Calculations Reconciliation of Net Income Attributable to Common Stockholders and Distributable Earnings Three Months Ended (unaudited) June 30, 2021 March 31, 2021 Net Income (Loss) $32,391 $31,955 Preferred Stock Dividends1 (6,799) (6,124) Participating Securities' Share in Earnings (Los
Slide 36: Consolidated Balance Sheets
ASSETS June 30, 2021 December 31, 2020 Cash and Cash Equivalents $239,743 $319,669 Restricted Cash 828 — Accounts Receivable 755 785 Collateralized Loan Proceeds Held at Trustee 53,832 174 Accounts Receivable from Servicer/Trustee 2,439 418 Accrued Interest and Fees Receivable 29,461 27,391 Loans He
Slide 37: Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income and Comprehensive Income All amounts in thousands except share and per share amounts (unaudited) Three Months Ended June 30, INTEREST INCOME 2021 2020 Interest Income $61,915 $70,051 Interest Expense (22,017) (25,865) Net Interest Income 39,898 44,186 OTHER REVENUE
Slide 38: Cash Flows from Operating Activities
Cash Flows from Operating Activities: June 30, 2021 June 30, 2020 Net Income (Loss) $64,347 ($189,862) Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: Amortization and Accretion of Premiums, Discounts and Loan Origination Fees, net (3,775) (5,627) Amortization of Def
Slide 39: Definitions and Disclaimers
Definitions and Disclaimers We use Distributable Earnings to evaluate our performance excluding the effects of certain transactions and GAAP adjustments we believe are not necessarily indicative of our current loan investment and operating activities. Distributable Earnings is a non-GAAP measure, wh
Slide 40: Definitions and Disclaimers (cont.)
Definitions and Disclaimers (cont.) Fundings to borrowers that are made under existing loan commitments after loan closing date Deferred Fundings Geographic Diversity TRTX provides herein additional detail by splitting the South region into separate Southeast and Southwest regions using definitions
Slide 41: Definitions and Disclaimers (cont.)
Definitions and Disclaimers (cont.) Bridge/Stabilization Loan - A loan with limited deferred fundings, generally less than 10% of the total loan commitment, which fundings are commonly conditioned on the borrower’s satisfaction of certain collateral performance tests. The related business plan gener
Slide 42: Definitions and Disclaimers (cont.)
Definitions and Disclaimers (cont.) Property Types Mixed-Use: TRTX classifies a loan as mixed-use if the property securing TRTX’s loan (a) involves more than one use; and (b) no single use represents more than 60% of the collateral property’s total value. In certain instances, TRTX’s classification
Slide 43: Company Information
Company Information Contact Information Headquarters: 888 Seventh Avenue 35th Floor New York, NY 10106 New York Stock Exchange: Symbol: TRTX TPG RE Finance Trust, Inc. Bob Foley Chief Financial Officer +1 (212) 430-4111 bfoley@tpg.com Brandon Fox +1 (415) 706-2751 bfox@tpg.com Investor Relations: +1
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