Tpg Re Finance Trust, Inc. · NYSE:TRTX
Tpg Re Finance Trust — Investor Presentation (November 2021)
41 slides from Tpg Re Finance Trust's investor presentation, Nov 12, 2021
Slide 1: TPG RE Finance Trust, Inc. Investor Presentation
November 2021 TPG RE Finance Trust, Inc. Investor Presentation 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 18 for additional detail 2. Refer to page 19 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 17 first mortgage loans during the nine months ended September 30, 2021 with total commitments of $1,280.7M; property type concentrations
Slide 7: 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 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 Engagement throughout the investment process Deep, extensive relationships with owners, borrowers, brokers and capital p
Slide 9: 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 10: Financial Performance
Financial Performance
Slide 11: Operating Performance and Dividend Coverage
Operating Performance and Dividend Coverage Ratio of Distributable Earnings2 to Common Dividend Nine Months Ended September 30, 2021 1. Refer to Appendix for reconciliation from GAAP Net Income (Loss) to Net Income (Loss) Attributable to Common Stockholders 2. Refer to Appendix for reconciliation fr
Slide 12: Liquidity and Leverage
Liquidity and Leverage Available Liquidity Leverage Ratio2 1. Cash held to satisfy the liquidity covenant under the secured credit agreements 2. See Appendix for definitions of Debt-to-Equity and Total Leverage Note: Totals may not sum due to rounding 12/31/2020 1 3/31/2021 Decrease driven by full u
Slide 13: Book Value Walk 3Q 2021
Book Value Walk 3Q 2021 1. 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 these warrants at September 30, 2021 is $15.21 2. TRTX stock price at September 30, 202
Slide 14: Loan Portfolio & Capitalization
Loan Portfolio & Capitalization
Slide 15: National, Major Market Footprint
National, Major Market Footprint2 Lending Focused in Top 25 Markets1 Top 25 Markets Account for 85.7% of Total Loan Commitments Loan Category Geographic Diversity Diversified Loan Portfolio Property Type2,3 1. Top 25 markets determined by US Census. Portfolio loans with collateral properties that ar
Slide 16: Select 3Q21 Loan Originations
Select 3Q21 Loan Originations Multifamily Multifamily Office (Life Science1) Multifamily $65.2M $188.0M $51.0M $45.9M Tampa, FL West New York, Jersey City, North Bergen & Guttenberg, NJ Rancho Bernardo (San Diego), CA San Antonio, TX 246-unit, garden-style apartment community built in 2013 65-buildi
Slide 17: YTD Loan Originations as of September 30, 2021
YTD Loan Originations as of September 30, 2021 Investment Highlights1 Closed 17 first mortgage loans Total commitments of $1,280.7M Initial fundings of $1,068.1M Average loan size of $75.3M 100% floating rate Weighted average interest rate of L + 3.49% Weighted average LIBOR floor of 19 bps Weighted
Slide 18: Potential Capital Deployment Scenarios
Investor Presentation | November 2021 Potential Capital Deployment Scenarios Maximum Potential Investment Capacity Full deployment of equity, targeting leverage of 3.75:1 Repayment of defaulted retail property loan, and sale of real estate owned asset both at carrying value, releasing an estimated $
Slide 19: Attractive Potential Total Return
Investor Presentation | November 2021 Attractive Potential Total Return Current market price to book value ratio of 0.83x TRTX offers attractive potential total return: 13.1% potential return if market price recovers to diluted book value 7.1% potential return based on annual dividend distributions,
Slide 20: Stock Price Appreciation
Stock Price Appreciation Stock price has increased $3.15, or 30.6% since January 4, 2021 November 5, 2021 stock price is 88.4% of current diluted book value Investor Presentation | November 2021
Slide 21: 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 22: Loan Financing Overview
Loan Financing Overview 1. Includes one non-consolidated senior interest of $132.0 million 2. Omits the impact of LIBOR floors on approximately 3% of our financing 3. Represents capacity available to be borrowed provided we pledge, and the lender approves, additional collateral assets 4. Based on ex
Slide 23: 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 1.33%) 77% of the loan portfolio is subject t
Slide 24: 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 84% Non-MTM Secured Credit Facility1 15% Non-MTM Collateralized Loan Obligations 85% No
Slide 25: Capital Structure Overview
Capital Structure Overview $50.0 (1%) $2,762.5 (53%) $847.3 (17%) $194.4 (4%) $1,251.0 (24%) Series C Preferred Stock Mortgage Loan Payable Collateralized Loan Obligations Secured Credit Agreements (MTM) Common Equity at Book Value ($ in millions) Maximum Capacity Maximum Capacity Maximum Capacity W
Slide 26: Appendix
Appendix
Slide 27: Investment Approach and Process
Investor Presentation | November 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 General Counsel Tripp
Slide 28: 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 29: Risk Ratings
Risk Ratings 1. See Appendix for a description of the Company’s Loan Risk Rating scale 2. Includes a single sponsor relationship with common control of 4 loans with total amortized cost of $23.0 million 3. Includes conversion of one first mortgage loan to Real Estate Owned with an amortized cost of
Slide 30: 3Q21 Interest Collections and Loan Performance
3Q21 Interest Collections Loan Performance PIK Interest TTM ($ in millions) 99.4% interest collections during 3Q21, including PIK interest of 0.7% 1. Loan defaulted in 4Q20 2. Based on Portfolio UPB at September 30, 2021 3. See Appendix for descriptions of Economic and Non-Economic Modifications 4.
Slide 31: 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 $290.8 $285.7 L+ 1.6% 2.9 years New York, NY Office $574 Sq. ft. 65.2% Loan 2 $223.0 $179.9 L+ 3.4% 2.9 years Brookhaven (Atlanta),
Slide 32: Per Share Calculations and Reconciliation
Per Share Calculations Reconciliation of Net Income Attributable to Common Stockholders and Distributable Earnings Three Months Ended (unaudited) September 30, 2021 June 30, 2021 March 31, 2021 Net Income (Loss) $29,325 $32,391 $31,955 Preferred Stock Dividends1 (3,157) (6,799) (6,124) Participating
Slide 33: Consolidated Balance Sheet
ASSETS September 30, 2021 December 31, 2020 Cash and Cash Equivalents $269,263 $319,669 Restricted Cash 667 — Accounts Receivable 17 785 Collateralized Loan Proceeds Held at Trustee 6,870 174 Accounts Receivable from Servicer/Trustee 8,639 418 Accrued Interest and Fees Receivable 28,650 27,391 Loans
Slide 34: 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 September 30, INTEREST INCOME 2021 2020 Interest Income $59,984 $69,854 Interest Expense (20,979) (21,450) Net Interest Income 39,005 48,404 OTHER REV
Slide 35: Cash Flows from Operating Activities
Cash Flows from Operating Activities: September 30, 2021 September 30, 2020 Net Income (Loss) $93,672 $(151,415) Adjustment to Reconcile Net Income to Net Cash Provided by Operating Activities: Amortization and Accretion of Premiums, Discounts and Loan Origination Fees, net (5,448) (8,515) Amortizat
Slide 36: Definitions and Disclaimers
Definitions and Disclaimers 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
Slide 37: Definitions and Disclaimers (cont.)
Definitions and Disclaimers (cont.) Geographic Diversity TRTX provides herein additional detail by splitting the South region into separate Southeast and Southwest regions using definitions established by The National Council of Real Estate Investment Fiduciaries (NCREIF). A reconciliation to TRTX’s
Slide 38: 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 39: 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 40: Definitions and Disclaimers (cont.)
Definitions and Disclaimers (cont.) Investor Presentation | November 2021 ROE Scenarios Disclaimer TRTX has presented two Assumed ROE scenarios for illustrative purposes only. These Assumed ROE scenarios are based on current market conditions and assumptions with respect to general business, economi
Slide 41: 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 Principal +1 (415) 706-2751 bfox@tpg.com Investor Rel
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