Tpg Re Finance Trust, Inc. · NYSE:TRTX
Tpg Re Finance Trust — Nareit's REITweek: 2022 Investor Conference
35 slides from Tpg Re Finance Trust's conference presentation, Jun 6, 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): June 6, 2022 TPG RE Finance Trust, Inc. (Exact Name of Registrant as Specified in i
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 moderated discussion in connection with Nareit’s REITweek: 2022 Investor Conference. A copy of the presentation is att
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: Ju
Slide 4: TPG RE Finance Trust, Inc.
Exhibit 99.1 TPG RE Finance Trust, Inc. Investor Presentation June 2022
Slide 5: Forward-Looking Statements and Other Disclosures
Forward-Looking Statements and Other Disclosures 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, wh
Slide 6: TPG RE Finance Trust, Inc.
TPG RE Finance Trust, Inc. Loan Portfolio Liquidity & Capitalization Dividends & Earnings $5.6 billion $6.4 billion3 $0.24 Investment Portfolio Total Financing Commitments 1Q22 Common Dividend Declared (Commitments) 11.7% 4.59% 72.5% 2.6x $0.25 $0.33 Net Interest Earning Weighted Average Non-Mark-to
Slide 7: TRTX Today
TRTX Today Doug Bouquard appointed TRTX CEO on April 25, 2022 New Leadership Doug Bouquard is a Partner of TPG (NASDAQ: TPG) and TPG Real Estate, TPG’s dedicated real estate investment platform demonstrating TPG’s commitment to real estate credit and the importance of connectivity between TPG an
Slide 8: Attractive Potential Total Return
Attractive Potential Total Return Current market price to book value ratio of 0.64x1 47.4% potential total return if market price recovers to diluted book value 9.1% potential current return based on current quarterly common stock dividend of $0.24 per share Market Price to Book Value Potentia
Slide 9: 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 Experienced team with a long history of collaborative investing through numerous credit a
Slide 10: 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 President Chief Investment Officer Chief Financial Officer General Counsel 18+ years of experience 20+ years of experience 30+ years of experience 30+ years of
Slide 11: Diversity, Equity & Inclusion Focus Areas
Diversity, Equity & Inclusion Focus Areas Gender Neutral benefits, policies, and resources designed to Benefits & support all employees Use of our influence and families and capital to advance Policies diversity and equality Talent Score of 100 from Management Corporate Equality Index measuring Advo
Slide 12: CRE Lending Market
CRE Lending Market 2021 US Originations by Sector1 Life Insurance 14% GSEs Debt Funds & 23% Mortgage REITs Other 15% 3% REIT Unsecured Banks 10% CMBS 21% 14% Originations by Debt Funds & Mortgage REITs $160 $120 $ billions $80 $40 $0 2017 2018 2019 2020 2021 Debt Fund 2 M-REIT 3 1. Source: Company F
Slide 13: Operating Performance and Common Dividend Coverage
Operating Performance and Common Dividend Coverage Operating Performance ($ in millions) 1Q22 4Q21 3Q21 2Q21 1Q21 GAAP Net Income $23.8 $44.9 $29.3 $32.4 $32.0 Net Income (Loss) Attributable to Common Stockholders1 $20.4 $41.4 $26.0 ($21.0) $24.2 Distributable Earnings2 $26.6 $18.5 $27.0 $21.9 $21.7
Slide 14: Liquidity and Leverage
Liquidity and Leverage Available Liquidity ($ in millions) Leverage Ratios2 Covenant Cash1 Cash Undrawn Capacity CLO Reinvestment Cash Debt-to-Equity Ratio Total Leverage Ratio $393.0 Target Leverage 3.75x $384.2 $0.3 $53.8 $32.3 2.59x 2.53x 2.49x 2.50x 2.44x 2.45x $326.1 2.40x 2.36x $321.1 $6.9 $0.
Slide 15: Book Value Walk 1Q 2022
Book Value Walk 1Q 2022 Change in Book Value Per Share Beginning Ending Book Value1 Book Value1 ($0.24) CECL Reserve per CECL Reserve per Share $0.37 Share $0.01 $0.66 $0.60 ($0.06) ($0.04) Net Income Excluding Credit Loss Expense Covers Both Common and Preferred Dividends $16.37 $16.41 Book Value N
Slide 16: YoY Loan Portfolio Walk
YoY Loan Portfolio Walk Originated 31 first mortgage loans from April 1, 2021 through March 31, 2022 with total commitments of $2.1 billion and an initial unpaid principal balance of $1.8 billion, representing approximately 38% of the current portfolio – 12.2% growth in commitments YoY; 11.7% grow
Slide 17: Loan Portfolio Overview
Loan Portfolio Overview Loan Investment Portfolio 1Q22 4Q21 QoQ Change Total Loan Commitments $5,593.3M $5,411.9M 3.4% Unpaid Principal Balance $5,125.2M $4,919.3M 4.2% Average Loan Size $76.6M $78.4M (2.3%) MSA Concentrations (Top 25 / Top 10) 80.2% / 50.3% 82.7% / 52.6% (3.0%) / (4.4%) Weighted Av
Slide 18: Diversified Loan Portfolio
Diversified Loan Portfolio National, Major Market Footprint1 Property1,3 Geographic1,3 MI PA NY Mixed-Use Hotel 3.8% 6.3% 14.0% MA 6.2% Southeast WA 1.3% 11.8% 0.1% 14.1% Other 0.9% 2 East Midwest 37.0% Multifamily 12.1% 30.7% NJ 3.4% IN OH IL Office 3.7% 0.8% 1.6% MD CO VA 2.2% Industrial 39.6% 0.9
Slide 19: Potential Capital Deployment Scenarios
Potential Capital Deployment Scenarios Multiple Potential Levers to Boost Earnings Growth Full deployment of equity, targeting leverage of 3.75:1 Redeploy the $78M of equity returned from the sale of REO1 in 4Q21 and 2Q22 Further diversify capital base including Term Loan B, convertible notes,
Slide 20: Risk Ratings
Risk Ratings Risk Ratings Migration Stable Risk Ratings Trailing 4 Quarter By Amortized Cost Average: 3.1 3.08 3.1 3.1 3.0 Risk Ratings – 3/31/2022 By Amortized Cost ($ in millions) Loan Count: 73 Total: $5,115.8 Weighted Average $3,360.8 Rating of 3.1 53 6/30/2021 9/30/2021 12/31/2021 3/31/2022 Sta
Slide 21: Risk Ratings by Property Type
Risk Ratings by Property Type Weighted Average Risk Ratings by Property Type1 by Amortized Cost 5.0 5.0 1Q 2022 Weighted Average Risk Rating: 3.1 1Q 2022 4Q 2021 4Q 2021 Weighted Average Risk Rating: 3.0 3.5 3.6 3.2 3.3 2.9 3.0 3.0 2.9 3.0 3.0 3.0 2.7 2.7 n/a Office Multifamily Hotel Life Science Mi
Slide 22: Multifamily and Office Loan Overview
Multifamily and Office Loan Overview Office Multifamily 39.6% of total loan commitments at March 31, 2022 30.7% total loan commitments at March 31, 2022 − 93.0% in Top 25 US MSAs / 75.3% in Top 10 − 59.4% in Top 25 US MSAs / 34.5% in Top 10 − 66.6% Weighted Average LTV1 − 74.2% Weighted Average
Slide 23: Case Studies: Largest Three Credit Exposures
Case Studies: Largest Three Credit Exposures Investment New York Office Atlanta Office Bay Area Life Science Loan Category1 Light Transitional Light Transitional Moderate Transitional Loan Risk Rating1 3 3 3 Investment Date August 2019 August 2018 May 2021 Collateral Class A Office; 507K SF Five Cla
Slide 24: Capital Structure
Capital Structure Capital Structure Composition Capital Structure Detail ($ in millions) $32.3 (1%) $23.5 (1%) W.A. Approved Look- Total Advance Through W.A. Cost W.A. Outstanding ($ in millions) Commitments Rate LTV of Funds Maturity at 3/31/21 Secured Credit Agreements $2,934.0 75.2% 51.0% 1.73% M
Slide 25: Loan Financing Overview
Loan Financing Overview 1Q22 Financing Activity Closed TRTX 2022-FL5, a $1.075 billion managed CRE CLO with a two-year reinvestment period, an advance rate of 84.4%, and a weighted average interest rate at issuance of Compounded SOFR plus 2.02%; simultaneously redeemed TRTX 2018-FL2, which at rede
Slide 26: Positioned for Rising Rates
Positioned for Rising Rates LIBOR and Term SOFR now exceed the March 31, 2021 weighted average floor of 1.05% Timing of crossover to positive interest sensitivity depends on the pace of loan originations and repayments, steepness of interest rate forward curves, and advance rate of borrowings Po
Slide 27: Rate Floors
Rate Floors Portfolio Floor Distribution by UPB ($ in millions)1 $2,000 $1,500 May 2022 July 2022 Sep 2022 Sep 2022 & 110 bps2 156 bps2 225 bps2 Beyond (Actuals at May (Forecasted) (Forecasted) $1,000 $1,996M 31, 2022) > 200 bps2 (Forecasted) $1,474M $500 $918M $547M $190M $0 50 bps or Less 51 - 100
Slide 28: Appendix
Appendix
Slide 29: 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): Three Months Ended (unaudited) Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 June 30,
Slide 30: Definitions
Definitions Distributable Earnings is a non-GAAP measure defined 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 excluding
Slide 31: Definitions (cont.)
Definitions (cont.) Deferred Fundings Fundings to borrowers that are made under existing loan commitments after a loan closing date TRTX divides the South region into separate Southeast and Southwest regions using definitions established by The National Council of Real Estate Investment Fiduciar
Slide 32: Definitions (cont.)
Definitions (cont.) Debt-to-Equity Ratio - Represents (i) total outstanding borrowings under secured financing arrangements, net, including collateralized loan obligations, secured credit agreements, a secured revolving credit facility, and a mortgage loan payable, less cash, to (ii) total stockho
Slide 33: 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 34: Definitions (cont.)
Definitions (cont.) Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows: – 1 - Outperform—Exceeds performance metrics (for example, technical milestones, occupancy, rents, net operating income
Slide 35: 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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