Tpg Re Finance Trust, Inc. · NYSE:TRTX
Tpg Re Finance Trust — Citi 2021 Virtual Global Property CEO Conference
33 slides from Tpg Re Finance Trust's conference presentation, Mar 9, 2021
Slide 1: Citi 2021 Virtual Global Property CEO Conference
Citi 2021 Virtual Global Property CEO Conference March 9, 2021
Slide 2: Forward-Looking Statements and Other Disclosures
Forward-Looking Statements and Other Disclosures The information contained in this earnings 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 forwar
Slide 3: TPG RE Finance Trust, Inc.
TPG RE Finance Trust, Inc. 63.5% Ratio of $4.9 billion $4.5 billion $12.4 billion Non-MTM Total Outstanding Unpaid Principal Loan Commitments 99.3% Originated or Acquired First Mortgage Loans Debt to Loan Commitments Balance of Loans Since December 2014 Total Debt 4.85% 100% 65.9% LIBOR Floors 57 Lo
Slide 4: Well Positioned for 2021 Opportunities
Well Positioned for 2021 Opportunities ▪ $342.6M of total liquidity at 12/31/2020, including $300.6M of cash-on-hand available for investment and other corporate purposes Dry Powder for ▪ Reinvested $618.8M of existing loans into CLOs during 2020, generating net cash of New $222.3M after repaying $3
Slide 5: Established, Proven CRE Lending Platform
Established, Proven CRE Lending Platform Sourcing Credit and Investing ▪ Integrated business within TPG Real Estate ($10.6B 1 ▪ Time-tested IRC process with demanding early AUM); employ unified approach to sourcing, warning hurdles relationships, market information, and data-driven ▪ Highly structur
Slide 6: Platform Highlights
Platform Highlights ▪ Balance sheet lender with loan portfolio of $4.9B in floating rate loan commitments, of which 99.3% are first mortgage loans ▪ Originated and acquired $12.4B of loan commitments since December Scale 2014 ▪ Harness TPG’s $84.8B AUM platform, informational and network advantages,
Slide 7: Career Credit Investors Drive Investment Strategy
Career Credit Investors Drive Investment Strategy Matt Coleman Peter Smith Bob Foley Deborah Ginsberg President Chief Investment Officer Chief Financial Officer General Counsel 20+ years of experience 25+ years of experience 30+ years of experience 15+ years of experience Select Experience Select Ex
Slide 8: 4Q 2020 Activity
4Q 2020 Activity Operating Performance 4Q20 YE 2020 Basic Earnings per Share1 $0.09 $(2.03) Diluted Earnings per Share1 $0.09 $(2.03) Basic Distributable Earnings per Share2 $0.15 $(1.39) Recurring Dividend on Common Shares $15.5M / $0.20 per share $79.6M / $1.03 per share Earnings Special Dividend
Slide 9: Operating Performance
Operating Performance 2Q20 - 4Q20 Operating Performance and Common Stock Dividend Coverage Operating Performance¹ 2Q20 3Q20 4Q20 Total ($ in millions) Net Income Attributable to Common Stockholders $40.1 $30.8 $6.6 $77.5 Distributable Earnings $17.5 $32.6 $11.7 $61.8 Cash Dividends Declared on Commo
Slide 10: Liquidity and Leverage
Liquidity and Leverage Available Liquidity Leverage Ratio Covenant Cash1 Cash Debt-to-Equity 2 Total Leverage3 Undrawn Capacity CLO Reinvestment Cash $359.7 3.72x $1.4 $0.1 $342.6 3.61x $333.6 $0.1 $22.8 $81.3 $286.2 2.93x 2.91x 2.84x 2.81x 2.76x $23.2 2.66x 2.54x $37.4 2.44x $279.1 $56.1 $167.8 $0.
Slide 11: Book Value Walk 4Q 2020
Book Value Walk 4Q 2020 Beg. Change in Book Value Per Share End. Book Value1 Book Value1 $16.78 ($0.01) $0.40 ($0.38) ($0.08) ($0.02) $0.02 $16.71 $0.16 2 ($0.21) $16.66 ($0.16)2 $16.50 $0.77 $0.77 $0.82 $0.82 CECL Non- Recurring Operations (127 bps at Recurring 12/31/2020)3 Book Value Issuance of N
Slide 12: Diversified Loan Portfolio
Diversified Loan Portfolio National, Major Market Footprint2 Property Diversity2 Geographic Diversity 2 Southeast Mixed-Use Hotel 13.7% MI PA NY 11.9% 14.9% 4.3% 7.4% 17.4% MA 2.9% Condominium 0.5% Retail East 0.7% Midwest 41.5% 8.7% Multifamily 16.3% NJ 3.3% IL 1.8% MD West VA 1.6% 22.8% MO KY 4.5%
Slide 13: Property Diversity by Region
Property Diversity by Region Exposure as % of Loan Portfolio1 Region Commitment Office Multifamily Hotel Mixed-Use (in Millions) East $2,050.9 25.9% 4.3% 5.0% 5.8% Midwest $428.4 5.5% 3.2% - - Southeast $678.3 6.6% 4.2% 3.0% - Southwest $657.0 3.9% 4.6% 1.5% 3.2% West $1,128.9 13.9% - 5.5% 2.8% Tota
Slide 14: Multifamily and Office Loan Overview
Multifamily and Office Loan Overview Office¹ Multifamily² ▪ 65.4% Weighted Average LTV3 ▪ 75.1% Weighted Average LTV3 ▪ 96.2% in Top 25 US MSAs ▪ 79.0% in Top 25 US MSAs ▪ 0% Construction Loans ▪ 0% Construction Loans ▪ $106.0M Average Loan Size ▪ $80.5M Average Loan Size 1. At December 31, 2020 rep
Slide 15: Risk Ratings
Risk Ratings Risk Ratings Migration1 Stable Risk Ratings 1 By Amortized Cost 3.16 3.12 3.10 3.08 2.86 Risk Ratings – 12/31/2020 By Amortized Cost ($ in Millions) Loan Count: 57 Total: $4,516.4 $3,340.7 Weighted Average 12/31/2019 3/31/2020 6/30/2020 9/30/2020 12/31/2020 Risk Rating of 3.1 Start of P
Slide 16: Capital Structure Overview
Capital Structure Overview Capital Stack Composition Capital Structure Detail ($ in millions) W.A. Approved Look- Maximum Advance Through W.A. Cost W.A. Outstanding Secured Credit $1,522.9 (31%) Agreements ($ in millions) Capacity Rate LTV of Funds Maturity at 12/31/20 Secured Credit $3,239.5 69.3%
Slide 17: Loan Financing Overview
Loan Financing Overview Loan Financing Arrangements as of December 31, 2020 ▪ Non-mark-to-market financings represent 63.5% of total loan portfolio financing 1 ▪ Total loan portfolio financing capacity of $5.1 billion with $1.7 billion of current availability ▪ Weighted average cost of funds of LIBO
Slide 18: Improvements in Leverage and Liquidity
Improvements in Leverage and Liquidity Gross Leverage Net Leverage Debt-to-Equity Ratio1 Ratio2 Ratio3 2.9x 2.8x 2.8x 2.7x 2.5x 2.4x 9/30/2020 12/31/2020 9/30/2020 12/31/2020 9/30/2020 12/31/2020 Total Debt Mark-to-Market Unrestricted Cash ($ in Millions) ($ in Millions) ($ in Millions) $3,645 45.9%
Slide 19: Interest Rate Sensitivity
Interest Rate Sensitivity ▪ 100% of the loan portfolio is indexed to one-month USD LIBOR ▪ Loan portfolio benefits from low rates due to high in-place LIBOR floors on loans 1 ; weighted average LIBOR floor of 1.66% – 100% of the loan portfolio is subject to a LIBOR floor of 0.50% or greater ▪ Approx
Slide 20: Appendix
Appendix
Slide 21: Investment Approach and Process
Investment Approach and Process Avi Banyasz Ken Murphy Matt Coleman Chairman of the Partner, President of TRTX | Investment Board of TRTX | Partner, Co-Chief Operating Officer of TPG Partner, TPG Real Estate COO Review TPG Real Estate Co- Head Committee Peter Smith Business Unit Partner Bob Foley De
Slide 22: Credit and Risk Management
Credit and Risk Management Credit Process Risk & Asset Management ▪ Senior management has an average of 25 years of ▪ Dedicated servicing and asset management team credit and underwriting experience ▪ Maintain updated tracking and evaluation system ▪ Bottom-up, equity-oriented approach to for vigila
Slide 23: Portfolio Construction
Portfolio Construction ($ in millions) Average Loan Size1 Geographic Region Loan Portfolio Yearly Loan Originations 70.0% 150.0 60.0% 100.0 50.0% 40.0% 50.0 30.0% 0.0 FYE 2014FYE 2015FYE 2016FYE 2017FYE 2018FYE 20191Q 2020 2Q 2020 3Q 2020 4Q 2020 20.0% 10.0% Portfolio-Wide As-Is LTV2 70.0% 0.0% FYE
Slide 24: Loan Modifications & Payment Performance
Loan Modifications & Payment Performance Loan Modifications at 12/31/201 4Q Interest Collections ▪ Economic modifications typically consist of repurposing of reserves, ▪ 96.7% interest collections during Q42 , including PIK of 1.7% equity contributions, and/or deferred PIK interest agreements PIK In
Slide 25: Series B Preferred Stock
Series B Preferred Stock Key Terms1 Rationale and Benefits to TRTX Investor P.E. Holder, LLC, an affiliate of Starwood Capital Group Global II, L.P. ▪ Increased capital base and liquidity Series B Cumulative Redeemable Preferred Stock (“Series B Preferred Stock”, ▪ Enabled voluntary deleveraging pay
Slide 26: Per Share Calculations
Per Share Calculations Year Ended Three Months Ended (unaudited) Dec 31, 2020 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Net Income (Loss) Attributable to Common ($155,532) $6,638 $30,782 $40,105 ($233,061) Stockholders 1 Earnings and Weighted-Average Number of Common Shares 76,656,756 76,7
Slide 27: Consolidated Balance Sheets
Consolidated Balance Sheets All amounts in thousands except share and per share amounts ASSETS December 31, 2020 December 31, 2019 Cash and Cash Equivalents $319,669 $79,182 Restricted Cash — 484 Accounts Receivable 785 2,344 Accounts Receivable from Servicer/Trustee 592 13,741 Accrued Interest and
Slide 28: 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 December 31 is unaudited) Three Months Ended Dec 31, Year Ended Dec 31, INTEREST INCOME 2020 2019 2020 2019 Interest Income 62,018 $82,597 283,672 $339,814 Inter
Slide 29: Definitions
Definitions ▪ 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 activity and operations. Distributable Earnings is a non-GAAP measure, which we define as GAAP net
Slide 30: Definitions (cont.)
Definitions (cont.) Net Income Attributable to ▪ Represents GAAP net income attributable to our common and Class A common stockholders after deducting dividends attributable to participating securities Common Stockholders Deferred ▪ Fundings to borrowers that are made under existing loan commitments
Slide 31: 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 32: Definitions (cont.)
Definitions (cont.) ▪ Using on a 5-point scale, TRTX’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, on a quarterly basis. Risk ratings are presented by amortized cost. The loan risk ratings are defined as follows: – 1: Outperform—Exceeds performance metrics (for e
Slide 33: 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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