Tpg Re Finance Trust, Inc. · NYSE:TRTX
Tpg Re Finance Trust — Citi 2022 Global Property CEO Conference
42 slides from Tpg Re Finance Trust's conference presentation, Mar 3, 2022
Slide 1: Form 8-K Cover Page
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): March 3, 2022 TPG RE Finance Trust, Inc. (Exact Name of Registrant as Specified in
Slide 2: Item 7.01 Regulation FD Disclosure
Item 7.01 Regulation FD Disclosure. Members of management of TPG RE Finance Trust, Inc. (the “Company”) will present an overview of the Company in investor one-on-one meetings and a roundtable discussion in connection with the Citi 2022 Global Property CEO Conference. A copy of the presentation is a
Slide 3: Signature
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. TPG RE Finance Trust, Inc. By: /s/ Robert Foley Name: Robert Foley Title: Chief Financial Officer Date: Ma
Slide 4: TPG RE Finance Trust, Inc.
Exhibit 99.1 TPG RE Finance Trust, Inc. Investor Presentation March 2022
Slide 5: Forward Looking Statements
Forward Looking Statements This presentation contains, and our officers and representatives may make, “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, which reflect our curren
Slide 6: TPG RE Finance Trust, Inc.
TPG RE Finance Trust, Inc. TRTX is a leading commercial mortgage REIT targeting direct origination of floating rate, transitional first mortgages to institutional borrowers Loan Portfolio Liquidity & Capitalization Dividends & Earnings $5.4 billion $5.8 billion2 $0.24 $0.07 $0.95 4Q21 (Regular) 4Q21
Slide 7: Platform Highlights
Platform Highlights Balance sheet lender with $5.4B in floating rate loan commitments, of which 99.3% are first mortgage loans Originated and acquired $14B of loan commitments since December Scale 2014 Harness TPG’s $109B AUM platform, informational and network advantages, and enhanced access
Slide 8: Momentum Drives Growth
Momentum Drives Growth Increase Distributable Earnings1 to drive share price appreciation – YTD Distributable Earnings1 covered common stock dividends at 1.2x Common stock dividends of $0.95 per common share in 2021, including a non‐recurring special cash dividend in 4Q21 of Drivers of Earnings
Slide 9: Momentum Drives Growth
Momentum Drives Growth Capital structure as of December 31, 2021 supports growth of loan portfolio and earnings: – Target leverage of up to 3.75x vs. current Debt‐to‐Equity and Total Leverage ratios of 2.36:1 and 2.45:1, respectively – Non‐mark‐to‐market financing of 70.4% of total loan portfolio
Slide 10: TPG Integration Drives Competitive Advantage
TPG Integration Drives Competitive Advantage TRTX benefits from the intellectual capital, deep relationships, specialized capabilities, and infrastructure of a leading global alternative asset management firm Benefit to TRTX Experienced team with a long history of collaborative TPG Operations inve
Slide 11: Career Credit Investors Drive Investment Strategy
Career Credit Investors Drive Investment Strategy Doug Bouquard Matt Coleman Peter Smith Bob Foley Deborah Ginsberg Chief Executive Officer 1 President Chief Investment Officer Chief Financial Officer General Counsel 18+ years of experience 20+ years of experience 25+ years of experience 30+ years o
Slide 12: TPG Commitment to Diversity, Equity & Inclusion
TPG Commitment to Diversity, Equity & Inclusion Benefits & Use of our influence Gender Neutral and capital to advance Policies benefits, policies, and diversity and equality resources designed to support all employees and families Talent Management Advocacy & Development 100+ women directors & Impac
Slide 13: Operating Performance and Dividend Coverage
Operating Performance and Dividend Coverage Operating Performance1,2 ($ in millions) FY 2021 4Q21 3Q21 2Q21 1Q21 GAAP Net Income (Loss) $138.6 $44.9 $29.3 $32.4 $32.0 Net Income (Loss) Attributable to Common Stockholders $70.7 $41.4 $26.0 ($21.0) $24.2 Distributable Earnings $89.0 $18.5 $27.0 $21.9
Slide 14: Liquidity and Leverage
Liquidity and Leverage Available Liquidity Leverage Ratios2 $632.9 Covenant Cash 1 Debt‐to‐Equity Ratio Total Leverage Ratio Decrease Cash driven by full utilization of Undrawn Capacity the $308.9M FL4 Ramp 2.83x during 2Q21 CLO Reinvestment Cash 2.72x $308.9 2.54x 2.53x 2.49x FL‐4 Ramp Cash 2.44x 2
Slide 15: Book Value Walk 4Q 2021
Book Value Walk 4Q 2021 Change in Book Value Per Share Beg. End. Book Value1 Book Value1 $0.37 ($0.31) CECL Reserve per Share $0.02 $0.60 CECL Reserve per ($0.04) Share $0.71 $0.20 1 $16.37 ($0.03) Net Income Excluding Credit ($0.11) $0.12 Loss Benefit Covers Common Dividends 1.84x; Covers Common an
Slide 16: FY 2021 Loan Activity
FY 2021 Loan Activity 36% of total loan portfolio commitments were originated in FY 2021 Originated 27 first mortgage loans with total loan commitments of $1,932.3 million and initial fundings of $1,632.6 million Average loan size of $71.6 million Weighted average interest rate of L +3.58%
Slide 17: Diversified Loan Portfolio
Diversified Loan Portfolio National, Major Market Footprint2 Property Type2,3 Geographic Diversity 2,3 MI PA NY Other 3.9% 6.7% 14.5% MA Mixed‐Use 1.1% 0.9%4 Hotel Southeast 6.4% 12.2% 14.6% East Midwest 35.6% Multifamily 29.5% 12.5% NJ 3.5% IN OH IL 3.8% 0.8% 1.7% MD CO Office 1.0% VA 2.3% MO KY 2.
Slide 18: 4Q & FY 2021 Loan Originations
4Q & FY 2021 Loan Originations 4Q 2021 Investment Highlights1,2 FY 2021 Originations vs. Total Portfolio Property Type 10 first mortgage loans as % of Total Loan Commitments FY 2021 Originations Total Portfolio Mixed‐Use Other 3 1.9% Hotel Mixed‐Use 0.9% Total loan commitments of $651.6 million
Slide 19: Select 4Q21 Loan Originations
Select 4Q21 Loan Originations Hotel Multifamily Multifamily Multifamily Commitment $74.0M $92.2 $80.0 $96.0 Location Los Angeles, CA Nashville, TN Arlington Heights, IL Los Angeles, CA 295‐key, 10‐story full‐service hotel featuring two food and beverage Three property, 640‐unit garden‐ Newly b
Slide 20: Credit and Risk Management
Credit and Risk Management Credit Process Risk & Asset Management Senior management has an average of 25 years of Dedicated servicing and asset management team credit and underwriting experience Maintain updated tracking and evaluation system Bottom‐up, equity‐oriented approach to for vigila
Slide 21: Risk Ratings
Risk Ratings Risk Ratings Migration1 Stable Risk Ratings 1 Trailing 4 Quarter By Amortized Cost Average: 3.11 3.11 3.08 3.06 3.03 Risk Ratings – 12/31/2021 By Amortized Cost ($ in millions) Loan Count: 69 Total: $4,909.2 Weighted Average Risk Rating $3,726.8 of 3.0 57 3/31/2021 6/30/2021 9/30/2021 1
Slide 22: Multifamily and Office Loans
Multifamily and Office Loans Office Multifamily 41.9% of the Company’s total loan commitments at December 31, 2021 29.5% of the Company’s total loan commitments at December 31, 2021 93.1% in Top 25 US MSAs / 75.3% in Top 10 62.6% in Top 25 US MSAs / 34.5% in Top 10 66.6% Weighted Average L
Slide 23: Case Studies: Largest Three Credit Exposures
Case Studies: Largest Three Credit Exposures Investment New York Office Atlanta Office Bay Area Life Science Loan Category1 Light Transitional Light Transitional Moderate Transitional Loan Risk Rating1 3 3 3 Investment Date August 2019 August 2018 May 2021 Collateral Class A Office; 507K SF Five Cla
Slide 24: Case Studies: Watchlist Loans
Case Studies: Watchlist Loans Investment Philadelphia Office Charlotte Hotel Brooklyn Office Loan Category1 Bridge Bridge Light Transitional Loan Risk Rating1 4 4 4 Investment Date June 2018 October 2017 September 2020 Collateral Class B Office; 1.07M SF 700 Key Hotel Office/Warehouse; 443K SF Spons
Slide 25: Capital Structure Overview
Capital Structure Overview Capital Stack Composition Capital Structure Detail ($ in millions) W.A. Approved Look‐ Maximum Advance Through W.A. Cost W.A. Outstanding ($ in millions) Capacity Rate LTV of Funds Maturity at 12/31/21 Secured Credit Agreements Secured $2,823.4 76.3% 51.4% 1.71% Feb 20242
Slide 26: Loan Financing Overview
Loan Financing Overview Financing Arrangements as of December 31, 2021 Total portfolio financing capacity of $5.8 billion1 with $1.9 billion of current availability Reduced weighted average cost of funds 15 bps from 4Q 2020 to 1.62% by replacing existing secured credit agreement borrowings with
Slide 27: Interest Rate Sensitivity
Interest Rate Sensitivity 100% of the loan portfolio is indexed to one‐month USD LIBOR as of December 31, 2021 Net interest margin (“NIM”) currently benefits from low rates due to high in‐place floors on loans (weighted average floor is 1.10%) – 34% of the loan portfolio is subject to a floor le
Slide 28: Portfolio Floor Migration
Portfolio Floor Migration FY 2021 full loan repayments and sales totaled $1.3 billion and had a weighted average floor of 1.85% FY 2021 loan originations included an aggregate initial unpaid principal balance of $1.6 billion with a weighted average floor of 0.16% Migration of Portfolio Floors 1
Slide 29: Appendix
Appendix
Slide 30: Investment Approach and Process
Investment Approach and Process Broad and deep investment perspective from integration Focus on credit quality and capital preservation with TPG and TPG RE Partners Target primary and select secondary markets with positive Downside protection through significant borrower equity economic dyna
Slide 31: Attractive Potential Total Return
Attractive Potential Total Return Current market price to book value ratio of 0.72x1 TRTX offers attractive potential total return: – 31.7% potential return if market price recovers to diluted book value – 8.2% potential return based on annual dividend distributions, assuming quarterly cash divi
Slide 32: Loan Portfolio Overview
Loan Portfolio Overview Year Ended Year Ended Loan Investment Portfolio December 31, 2021 December 31, 2020 YoY Change Total Loan Commitments $5,411.9M $4,943.5M 9.5% Unpaid Principal Balance $4,919.3M $4,524.7M 8.7% Average Loan Size $78.4M $86.7M (9.5%) Loan Repayments and Sales $1,384.0M1 $1,143.
Slide 33: TRTX Loan Portfolio
TRTX Loan Portfolio $ Millions Commitment TRTX Loan TRTX Loan Extended Property Per Sq. ft. / Loan Name Commitment1 Balance2 Interest Rate Maturity Location Type Unit LTV3 Risk Rating3 Loan 1 $290.8 $288.6 L+ 1.6% 2.7 years New York, NY Office $574 Sq. ft. 65.2%4 3 Brookhaven Loan 2 $223.0 $180.2 L+
Slide 34: Per Share Calculations
Per Share Calculations The following tables provide a reconciliation of GAAP net income to GAAP net income attributable to common stockholders and Distributable Earnings (in thousands, except share and per share data): Year Ended Three Months Ended (unaudited) Dec 31, 2021 Dec 31, 2021 Sep 30, 202
Slide 35: Consolidated Balance Sheets
Consolidated Balance Sheets All amounts in thousands except share and per share amounts ASSETS December 31, 2021 December 31, 2020 Cash and Cash Equivalents $260,635 $319,669 Restricted Cash 404 — Accounts Receivable 12 785 Collateralized Loan Proceeds Held at Trustee 204 174 Accounts Receivable fro
Slide 36: Consolidated Statements of Income and Comprehensive Income
Consolidated Statements of Income and Comprehensive Income All amounts in thousands except share and per share amounts Three Months Ended, Year Ended, December 31, September 30, December 31, December 31, December 31, December 31, 2021 2021 2020 2021 2020 2019 Interest Income and Interest Expense Int
Slide 37: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows All amounts in thousands Year Ended Cash Flows from Operating Activities: December 31, 2021 December 31, 2020 Net Income (Loss) 138,550 (136,826) Adjustment to Reconcile Net Income (Loss) to Net Cash Flows from Operating Activities: Amortization and Accretion of
Slide 38: Definitions
Definitions Distributable Earnings is a non‐GAAP measure, which we define as GAAP net income (loss) attributable to our common stockholders, including realized gains and losses, regardless of whether such items are included in other comprehensive income or loss, or in GAAP net income (loss), and e
Slide 39: Definitions (cont.)
Definitions (cont.) Deferred Fundings Fundings to borrowers that are made under existing loan commitments after loan closing date TRTX provides herein additional detail by splitting the South region into separate Southeast and Southwest regions using definitions established by The National Counc
Slide 40: Definitions (cont.)
Definitions (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 generally involves
Slide 41: Definitions (cont.)
Definitions (cont.) TRTX creates structural leverage through the co‐origination or non‐recourse syndication of a senior loan interest to a Non‐Consolidated third‐party. In either case, the senior mortgage loan (i.e., the non‐consolidated senior interest) is not included on our Senior Interest bala
Slide 42: Company Information
Company Information 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
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