Tpg Re Finance Trust, Inc. · NYSE:TRTX
Tpg Re Finance Trust — Investor Presentation (March 2022)
39 slides from Tpg Re Finance Trust's investor presentation, Mar 3, 2022
Slide 1: TPG RE Finance Trust, Inc. Investor Presentation
March 2022 TPG RE Finance Trust, Inc. Investor Presentation Exhibit 99.1
Slide 2: Forward Looking Statements
2 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 curr
Slide 3: $5.4 billion Investment Portfolio
3 TPG RE Finance Trust, Inc. $5.4 billion Investment Portfolio 1. See Appendix for definitions, including LTV and Total Leverage Ratio 2. Includes one non-consolidated senior interest of $132.0 million; See Appendix for definitions, including non-consolidated senior interest 3. See page 11 for addit
Slide 4: Platform Highlights
4 Platform Highlights Scale 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 2014 Harness TPG’s $109B AUM platform, informational and network advantages, and enhanced access to t
Slide 5: Momentum Drives Growth
Momentum Drives Growth Highly selective loan origination strategy targeting multifamily and life science assets in high-growth regions with experienced sponsors Originated 27 first mortgage loans3 in 2021 with total loan commitments of $1.9 billion, an aggregate initial unpaid principal balance of $
Slide 6: 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 financ
Slide 7: TPG Integration Drives Competitive Advantage
7 TPG Integration 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 with
Slide 8: Career Credit Investors Drive Investment Strategy
8 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
Slide 9: TPG Commitment to Diversity, Equity & Inclusion
9 TPG Commitment to Diversity, Equity & Inclusion 9 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 representati
Slide 10: Operating Performance and Dividend Coverage
10 Operating Performance and Dividend Coverage FY 2021 Ratio of Distributable Earnings to Common Dividend 1. Refer to Appendix for reconciliation from GAAP Net Income (Loss) to Distributable Earnings 2. See appendix for definitions; Totals may not sum due to rounding Dividend Coverage of 1.2x Specia
Slide 11: Liquidity and Leverage
Liquidity and Leverage Available Liquidity Leverage Ratios2 1. Cash held to satisfy liquidity covenants under secured credit agreements 2. See Appendix for definitions of Debt-to-Equity Ratio and Total Leverage Ratio Note: Totals may not sum due to rounding 12/31/2020 11 Decrease driven by full util
Slide 12: Book Value Walk
12 Book Value Walk 4Q 2021 1. Does not reflect dilutive impact of 12M warrants held by an affiliate of Starwood Capital Group 2. Impact of an $8.2 million partial write-off of a loan held for investment (recognized as a partial worthlessness deduction for income tax purposes) related to a non-perfor
Slide 13: FY 2021 Loan Activity
13 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 $1,632.6 million YTD Loan Funding Activity ($ in millions) 1. Loan Commitments represent principal co
Slide 14: Top Markets Account for 82.7% of Total Loan Commitments
Top 25 Markets Account for 82.7% of Total Loan Commitments Diversified Loan Portfolio 1. Top 25 markets determined by US Census. Portfolio loans with collateral properties that are located in different MSAs are classified in the market designation with over 50% of underlying loan collateral by unpai
Slide 15: 4Q & FY 2021 Loan Originations
15 4Q & FY 2021 Loan Originations 4Q 2021 Investment Highlights1,2 73.3% of 2021 originations in Top 25 MSAs Increased exposure to Western US markets Reduced exposure to Eastern US markets Continued focus on MFR and Life Sciences FY 2021 Originations vs. Total Portfolio Geographic Diversity as % of
Slide 16: Select 4Q21 Loan Originations
16 Select 4Q21 Loan Originations Commitment Location Collateral Borrower Business Plan LTV / In-Place Debt Yield1,2 Loan Category1 Property Photos Investment Date 1. See Appendix for definitions, including LTV and Loan Category 2. In-place debt yield for loans originated during 4Q21 is defined as th
Slide 17: Credit and Risk Management
17 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-weathe
Slide 18: Risk Ratings
Risk Ratings 1. See Appendix for a description of the Company’s Loan Risk Rating scale Note: Data as of December 31, 2021 Stable Risk Ratings1 By Amortized Cost By Amortized Cost Trailing 4 Quarter Average: 103 bps of Total Loan Commitment bps of Total Loan Commitments 18 1 Trailing 4 Quarter Averag
Slide 19: Multifamily and Office Loans
Multifamily and Office Loans Office 41.9% of the Company’s total loan commitments at December 31, 2021 93.1% in Top 25 US MSAs / 75.3% in Top 10 66.6% Weighted Average LTV1 Weighted average underlying lease term of 5.9 years Weighted Average Risk Rating1 of 2.9 Multifamily 1. See Appendix for a desc
Slide 20: Case Studies: Largest Three Credit Exposures
Case Studies: Largest Three Credit Exposures 20 Investor Presentation | March 2022 Loan Category1 Investment Investment Date Collateral Sponsors Commitment Current Principal Amount Commitment Per Sq. ft. Coupon LTV1 Extended Maturity Loan Risk Rating1 Property Photos 1. See Appendix for a descriptio
Slide 21: Case Studies: Watchlist Loans
Case Studies: Watchlist Loans 21 Investor Presentation | March 2022 Loan Category1 Investment Investment Date Collateral Sponsors Commitment Current Principal Amount Commitment Per Sq. ft. / Unit Coupon LTV1 Extended Maturity Loan Risk Rating1 Property Photos 1. See Appendix for a description of the
Slide 22: Capital Structure Overview
Capital Structure Overview $194.4 (4%) $1,270.3 (24%) Series C Preferred Stock Common Equity at Book Value Capital Stack Composition Capital Structure Detail ($ in millions) 1. Includes one secured credit facility which may be re-margined beginning after its second anniversary date on October 30, 20
Slide 23: Loan Financing Overview
Loan Financing Overview 1. Includes one non-consolidated senior interest of $132.0 million; See Appendix for definitions, including non-consolidated senior interest 2. Omits the impact of interest rate floors on approximately 2% of our financing arrangements 3. Represents capacity available to be bo
Slide 24: Interest Rate Sensitivity
24 Interest Rate Sensitivity LIBOR = 0.00% LIBOR as of 12/31/2021 0.10% 0.25% 0.50% 0.75% 1.00% Portfolio Income Sensitivity ($ Impact per Share per Quarter)1 LIBOR 100% of the loan portfolio is indexed to one-month USD LIBOR as of December 31, 2021 Net interest margin (“NIM”) currently benefits fro
Slide 25: Portfolio Floor Migration
25 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% 1. Based on loan portfolio compos
Slide 26: Appendix
Appendix
Slide 27: Investment Approach and Process
27 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 Johnson Partner Erin Nemser Partne
Slide 28: Attractive Potential Total Return
28 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 dividend
Slide 29: Loan Portfolio Overview
29 Loan Portfolio Overview Property Type Migration (as a % of Total Loan Commitments) Future Funding as a Percentage of Total Loan Commitments 1. Includes an $8.2 million partial write-off of a loan held for investment (recognized as a partial worthlessness deduction for income tax purposes) related
Slide 30: TRTX Loan Portfolio
30 TRTX Loan Portfolio 1. Represents TRTX’s potential maximum loan commitment/balance 2. Represents TRTX’s current loan balance and excludes third party pari passu and junior positions in the same capital structure, if any 3. See Appendix for a description of the Company’s Loan Risk Rating scale and
Slide 31: Per Share Calculations
31 Per Share Calculations Reconciliation of Net Income Attributable to Common Stockholders and Distributable Earnings 1. Includes preferred stock dividends declared and paid for Series A preferred stock, Series C Preferred Stock, and Series B Preferred Stock shares outstanding for the three months a
Slide 32: Consolidated Balance Sheets
All amounts in thousands except share and per share amounts 32 Consolidated Balance Sheets Investor Presentation | March 2022
Slide 33: Consolidated Statements of Income and Comprehensive Income
33 Consolidated Statements of Income and Comprehensive Income All amounts in thousands except share and per share amounts Investor Presentation | March 2022
Slide 34: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows All amounts in thousands Year Ended 34 Investor Presentation | March 2022
Slide 35: 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 exc
Slide 36: Definitions (cont.)
Definitions (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 established by T
Slide 37: Definitions (cont.)
Definitions (cont.) 37 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 38: Definitions (cont.)
Definitions (cont.) 38 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 may be determ
Slide 39: 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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