Tpg Re Finance Trust, Inc. · NYSE:TRTX
Tpg Re Finance Trust — Investor Presentation (June 2022)
32 slides from Tpg Re Finance Trust's investor presentation, Jun 6, 2022
Slide 1: TPG RE Finance Trust, Inc. Investor Presentation June 2022
Exhibit 99.1 TPG RE Finance Trust, Inc. Investor Presentation June 2022
Slide 2: 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 3: TPG RE Finance Trust key metrics: loan portfolio, liquidity, dividends and earnings
TPG RE Finance Trust, Inc. Loan Portfolio Liquidity & Capitalization Dividends & Earnings 3 $5.6 billion $6.4 billion $0.24 Investment Portfolio Total Financing Commitments 1Q22 Common Dividend Declared (Commitments) 11.7% 72.5% 2.6x $0.25 $0.33 4.59% Net Interest Earning Non-Mark-to-Market Total Le
Slide 4: 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 5: Attractive Potential Total Return
Attractive Potential Total Return 1 § Current market price to book value ratio of 0.64x § 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 Potenti
Slide 6: 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 ü Experienced team with a long history of collaborative investing through numerous credit a
Slide 7: Career Credit Investors Drive Investment Strategy
Career Credit Investors Drive Investment Strategy Matt Coleman Deborah Ginsberg Doug Bouquard Peter Smith Bob Foley President General Counsel Chief Executive Officer Chief Investment Officer Chief Financial Officer 20+ years of experience 20+ years of experience 18+ years of experience 30+ years of
Slide 8: Diversity, Equity & Inclusion Focus Areas
Diversity, Equity & Inclusion Focus Areas Gender Neutral benefits, policies, and resources designed to support all employees Benefits & Use of our influence and families Policies and capital to advance diversity and equality Score of 100 from Talent Corporate Equality Management Index measuring & De
Slide 9: CRE Lending Market
CRE Lending Market 1 2021 US Originations by Sector Life Insurance 14% GSEs Debt Funds & 23% Mortgage REITs Other 15% 3% REIT Unsecured 10% Banks CMBS 21% 14% Originations by Debt Funds & Mortgage REITs $160 $120 $80 $40 $0 2017 2018 2019 2020 2021 2 3 Debt Fund M-REIT 1. Source: Company Filings, MB
Slide 10: Operating Performance and Common Dividend Coverage
Operating Performance and Common Dividend Coverage Operating Performance 1Q22 4Q21 3Q21 2Q21 1Q21 ($ in millions) GAAP Net Income $23.8 $44.9 $29.3 $32.4 $32.0 1 Net Income (Loss) Attributable to Common Stockholders $20.4 $41.4 $26.0 ($21.0) $24.2 2 Distributable Earnings $26.6 $18.5 $27.0 $21.9 $21
Slide 11: Liquidity and Leverage
Liquidity and Leverage 2 Available Liquidity ($ in millions) Leverage Ratios 1 Covenant Cash Cash Undrawn Capacity CLO Reinvestment Cash Debt-to-Equity Ratio Total Leverage Ratio Target Leverage 3.75x $393.0 $384.2 $0.3 2.59x $32.3 $53.8 2.53x 2.50x 2.49x 2.45x 2.44x 2.40x $326.1 2.36x $321.1 $6.9 $
Slide 12: Book Value Walk
Book Value Walk 1Q 2022 Change in Book Value Per Share Beginning Ending 1 1 Book Value Book Value ($0.24) CECL Reserve per CECL Reserve per Share $0.37 Share $0.66 $0.01 $0.60 ($0.06) ($0.04) Net Income Excluding Credit Loss Expense Covers Both Common and Preferred Dividends $16.41 $16.37 Book Value
Slide 13: 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 14: 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 15: Diversified Loan Portfolio
Diversified Loan Portfolio 1 1,3 1,3 National, Major Market Footprint Property Geographic Mixed-Use MI Hotel PA NY MA Southeast 3.8% 6.3% 14.0% 6.2% 11.8% WA 1.3% 14.1% 0.1% Other 2 0.9% East Midwest 37.0% Multifamily 12.1% 30.7% NJ 3.4% OH IN IL 1.6% Office 0.8% MD 3.7% CO VA 2.2% Industrial 39.6%
Slide 16: 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 1 § Redeploy the $78M of equity returned from the sale of REO in 4Q21 and 2Q22 § Further diversify capital base including Term Loan B, convertible notes
Slide 17: Risk Ratings
Risk Ratings Risk Ratings Migration Trailing 4 Stable Risk Ratings By Amortized Cost Quarter Average: 3.1 3.1 3.08 3.1 3.0 Risk Ratings – 3/31/2022 By Amortized Cost ($ in millions) Loan Count: 73 Total: $5,115.8 Weighted Average $3,360.8 Rating of 3.1 53 6/30/2021 9/30/2021 12/31/2021 3/31/2022 Sta
Slide 18: Risk Ratings by Property Type
Risk Ratings by Property Type 1 Weighted Average Risk Ratings by Property Type by Amortized Cost 5.0 5.0 1Q 2022 Weighted Average Risk Rating: 3.1 1Q 2022 4Q 2021 4Q 2021 Weighted Average Risk Rating: 3.0 3.6 3.5 3.3 3.2 3.0 3.0 3.0 3.0 3.0 2.9 2.9 2.7 2.7 n/a Office Multifamily Hotel Life Science M
Slide 19: Multifamily and Office Loan Overview
Multifamily and Office Loan Overview Office Multifamily § 39.6% of total loan commitments at March 31, 2022 § 30.7% total loan commitments at March 31, 2022 − 93.0% in Top 25 US MSAs / 75.3% in Top 10 − 59.4% in Top 25 US MSAs / 34.5% in Top 10 1 1 − 66.6% Weighted Average LTV − 74.2% Weighted Avera
Slide 20: Case Studies: Largest Three Credit Exposures
Case Studies: Largest Three Credit Exposures Investment New York Office Atlanta Office Bay Area Life Science 1 Loan Category Light Transitional Light Transitional Moderate Transitional 1 Loan Risk Rating 3 3 3 Investment Date August 2019 August 2018 May 2021 Collateral Class A Office; 507K SF Five C
Slide 21: Capital Structure
Capital Structure Capital Structure Composition Capital Structure Detail ($ 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 3 $2,934.0 75.2% 51.0% 1.73%
Slide 22: Loan Financing Overview
Loan Financing Overview 1Q22 Financing Activity § Closed TRTX 2022-FL5, a $1.075 billion managed CRE CLO with a two-year reinvestment period, an advance rate of 84.4%, and a weighted average interest rate at issuance of Compounded SOFR plus 2.02%; simultaneously redeemed TRTX 2018-FL2, which at rede
Slide 23: Positioned for Rising Rates
Positioned for Rising Rates § LIBOR and Term SOFR now exceed the March 31, 2021 weighted average floor of 1.05% § Timing of crossover to positive interest sensitivity depends on the pace of loan originations and repayments, steepness of interest rate forward curves, and advance rate of borrowings 1
Slide 24: Rate Floors
Rate Floors 1 Portfolio Floor Distribution by UPB ($ in millions) $2,000 $1,500 May 2022 July 2022 Sep 2022 Sep 2022 & 2 2 2 110 bps 156 bps 225 bps Beyond (Actuals at May (Forecasted) (Forecasted) 2 > 200 bps $1,000 31, 2022) $1,996M (Forecasted) $1,474M $500 $918M $190M $547M $0 50 bps or Less 51
Slide 25: Appendix
Appendix
Slide 26: 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 27: 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 28: Definitions (cont.)
Definitions (cont.) § Fundings to borrowers that are made under existing loan commitments after a loan closing date Deferred Fundings § TRTX divides the South region into separate Southeast and Southwest regions using definitions established by The National Council of Real Estate Investment Fiduciar
Slide 29: 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 30: 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 balance sheet. When
Slide 31: 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 32: 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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