LADR - Earnings call transcript Q1 2020

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Operator

Good day and welcome to the Ladder Capital Corporation First Quarter 2020 Earnings Call. Today’s conference is being recorded.

At this time, I would like to turn the conference call over to Michelle Wallach, Chief Compliance Officer and Senior Regulatory Counsel. Please go ahead.

Michelle Wallach

Thank you and good afternoon, everyone.

Capital call Ladder quarter the began XXXXX. we Corp for earnings first Before if acknowledge did the be I I’d remised not it caused impacts has the worldwide. that and pandemic

during hope safe everyone We unprecedented continue and to healthy times. these remains truly

we’re working term the plan crisis and effectively the employees and operating our We all near of remote activate to been priority moved included Ladder As the swiftly Ladder’s remotely our efficiently. corporate Despite health employees. unfolded workplace since wellbeing mid-March. safety business and have continuity

Turning earnings quarter what Harris, share Marc will Brian, our currently they’re then our Officer; call. to Officer. afternoon With the Marc and up open we’ll and are our Pamela their to seeing in me comments Brian the Fox, President; and Executive Financial call and this our about Chief company’s second questions. the Chief Pamela quarter McCormack, first

Investor The SEC company’s on XX, will This week. is available afternoon, ended quarter filed Form we March the section released the this our earnings the quarterly with report release for be and our results Relations of XXXX. later XX-Q financial in website the

results the expressed also differ our undertake We’ll for Form these some Before statements. results. I’d update this I remind to Actual of may refer to that materially call call. most to measures recent description on of we XX-Q duty affect begins, risks you XX-K any may this statements. and forward-looking certain our Form from like to the non-GAAP that refer this those call, on or include not implied everyone and call may do

website and is the rconciliation measures in available our a non-GAAP on including to information release. most comparable Additional these earnings GAAP measures ir.laddercapital.com our of

Pamela to turn the I’ll that, over our With President, call McCormack.

Pamela McCormack

afternoon, you, everyone. and Michelle good Thank

of And loved First and times. Michelle and from spread during line. Ladder’s to remain and environment The COVID-XX foremost as different the so during operating rapid global echo I are quarter these your essential said, unprecedented special the scale January. and there front all what a on thank very and first you clearly works safe ones out changed healthy looked March you hope I

approximately of Ladder $XX.X million $XXX per million pleased inclusive have X%. our after assets billion return first of currently Remarkably first tax of on represents or to produced is XXXX, $X.XX core unencumbered of unencumbered of equity unrestricted $X.X and core the an approximately includes reflecting report I’m During quarter balance such share cash we cash our that of unencumbered of $X.XX mortgage over XX% asset loans. our earnings and billion total asset.

XX% for unencumbered Cash strong balance of Ladder quality and alone a represents approximately sheet. composition our a clear is pool differentiator element key of our a assets. and The our assets of

While today’s unique it circumstances project uncertainty. difficult the future to make

well recent approach advantage from that of proactive sector impact to and historically further manage disruption. We’re confident leaves Ladder’s the that opportunities potential COVID-XX arise our of the positioned conservative company measure and take in

in its call. The cash impact grade point in in With speculative likely part cash Ladder’s investment security stock roughly believe out will due trading currently like is two come fear which build is discuss that I’d over our large balance. this up further on our holding. significant of to at market we’ll waves. We this COVID-XX liquidity to

securities despite on mark-to-market having The that portfolio. first We say squeeze on wave was hard would loan financing liquidity. our

credit. The will be second wave on

same that very for We’re of positioned with help the portfolio. better that even

our portfolio represents XX% to grade Our the benefits government of backed their almost enhanced of duration assets. mortgages portfolio rated and senior most securities AAA pivoted expect a investment first of entirely stable off to current of super prices. mezzanine and to in senior shareholders intentionally liquidity be We we when this bond currently beneficial which structural continue securities environment transactions loan is our to or the given and compared significant profile, credit the underlying to short

margins constantly calls available reported recent met on cash Ladder, in previously received As largest hand with times. all market during dislocation the

a take to equity our portfolio risk a with be cash unencumbered to order stake the and significant [indiscernible] spreads. manager in dislocations securities leverage. weather significant firm loans approach and highly prepared and we liquid in balanced As use maintain mortgage We with first portfolio our a of in prudent available to of combination

quickly to in $XXX further positioned million dislocation. our potential allow and well available to remained respond will of cash We us readily

maturity. to to have and the now We hold portfolio payoff financial at been continue to par full have we securities through wherewithal our

not entire underlying stages initial from elected collateral of at repayment accelerate a positions at benefit we to also the structural cash level. provision own Many the our stress loss Second, and suites majority sell securities securities actually of that the the COVID-XX. the portfolio overcollateralization flow of upon our of the we during AAA

securities reinforced. investment. selected recovery holding sell the in elect despite liquidate a We senior market our our was fear With view in opportunistically to AAA at securities to pricing, most our secured certain and loss decision our our but may are portfolio not

as expect AAA and overtime. down cash source We delever serve enhanced stay to reliable of naturally portfolio this our flow as

business is model multi-cylinder working. Our

that equity only of contrast space have long-term In amortizes XX% which by all our list this necessity based loan, assets allocated properties sheet is of of are in nearly enviable and are addition assets lease portfolio net essential assets position to to or businesses our triple in segment. stand our all in balance that which of XX% within to XX% our dominated others stark concentrated our tenants scenario one and cash are disruptive currently significant in securities our invested hyper super of situation.

from portfolio benefit In balance loan granularity sheet significant and addition, our diversity.

have spread and million place same X.XX and XX% across our where weighted the At renovation. a currently loans loan size, are our a [indiscernible] XX%. sheet LTV have loans range loans within to origination, property close of asset $XX had the And completed have these balance stabilization times transitional average These result investments reserve. a average our As of are market. of types likely wide borrowers, geographic

third-party with equity company and almost to prudent of value loan. for significant protect a and third-party to is provide for very their strong form our Like the be our protective is all that our portfolio call any subject in have protect margin them of these is half whatsoever. on management approval The provide lenders unencumbered is and focused motivation risk asset loan substantial borrowers the the of enhance equity loans missed asset What often we’ll to not to therefore amendment of cushion.

liquid to the and retain extremely not composition us with transactions positions in have that in B and CLO space security as The and of five and mortgage do engage Ladder’s to asset asset pieces quality opposed liquidity REIT because interest we pool shareholder uniquely value in highly is exceptional unencumbered event construction performance limited CMBS to that and future half news lending. the predetermined obligations good modest based new are million $XXX leasing as related of three or total tenant currently have other of funding over NOI improvements or occupancy subject the achievement commission We of And over specific years. such next hurdle. leases to defend

earnings As call Brian noted our on and long before last COVID-XX.

affected backed properties. began securities, The pivot exposure asset most by our adversely to this loans to towards our to hotel retail crisis. by reduce we and addition classes In

COVID-XX represented sheet property and our operating expected of of limits and normal only properties retail X% March underlying respectively. into balance portfolio As our hotel results. loan nature The XX% XX, visibility of unique

loan current. portfolio XX% April of remained In approximately our

their and future performance Program with results. held unemployment assist including We borrowers and application diminution will certain be expect We also stimulus stress the programs other tenants certain Protection will by borrowers But some operating of were which in seeing payroll we insurance in the economic believe businesses. Paycheck cost.

Our mortgages term leased to our net average countercyclical credit net groceries and years. pharmacies portfolio then that with principally remaining XX triple XX% to enjoy $XXX tenants. lease equity portfolio We non-recourse property The million businesses an accounts over investment. real long-term financed generally of necessity-based lease is by of and estate

of three source well example, and all tenants historically a reliable largest The are portfolio our Dollar and of way it has these highly during in been Walgreens expect to of times. General, are perform continue we to BJs nature. turbulent defensive which income By

As the series balance strengthen call maturities stagnant on the well through replacing ahead with of secure we bond out debt and of detailed through with unsecured corporate also our expanding of long-term began to XXXX. debt issuances previous sheet execution earnings crisis, unsecured

$XXX $X.X currently large have bonds bond was offering billion offering seven-year the We That closed proceeds of debt. as portion January. off of of recent million the our we pay unsecured in given the company’s turn was issuances the four use of outstanding events, timely secured including from particularly

structure non-recourse XX% use of of Since while our our XX% expanded As of capital by unsecured approximately financing end, XX%. our financing to non-recourse and financing, of mark-to-mark base liabilities our we equity. today, consisted quarter reducing book debt

non related total financing secured debt of our mark-to-market. outstanding approximately now of is loans half nearly XX% Consequently completely to our and

across limited fact, against portfolio. entire $XXX others related these our financing currently kind secured of million hotels. $XX.X advance hotels our Nonetheless pleased have decreasing on outstanding total of we’re any to to also like facilities we report leverage we been In only and our that mark-to-market have two loan repo loan debt million to is cross-collateralized

we immediately extended down to our facilities. crisis strategic new financing the unfolded drew revolver corporate we into and maximize financing two As and thought terms liquidity entered

expect fees malls As opportunity us alternative also on this financing to and company to and engaged best the previously dislocation strategic investment we to valuating market in companies we create. assist reported, position the

Tom partner back and trusted Harney and him colleagues have the former our we’re [ph] team. on reengaged also to Ladder We delighted

affiliate is to established and Real LLC, With secured an subject $XXX facility million provision. the facility mark-to-mark with non-recourse, of contain the sheet to finance any Moelis, assistance warehouse of Industries. limited not Coke The Estate exception new Coke does Investment loans Ladder balance

provides this in preserve facility and Ladder with considerable of million. million Rights stake exercising Coke the company us help to our and forbear terms of term over up to of facility of In value X% to optionality unrestricted provides for $XXX remedies. $XX the and loan. connection the The issued Ladder and Purchase the provide flexibility modify also facility underlying enhance cash with The max in the financing restructure facility, Coke with additional

relationship the this result available. company playing At promising the same helpful as offense the a strategic opportunities expect transaction prove time from investment to may in aligns become that we with disruption

by Forecast up XX% make X.X%, agreeing this when believes liquidity only Coke in the premium price to they $XX the with equity million and that due to Ladder Ladder December commitment meaningful was deal a evidenced investment. which long-term additional to if dilution their equated this of lock purchase would a of at of struck. year

company private that million XX% $XXX of advance This financed is non-recourse first provision. rate the mark-to-market loan a reports proceeds. also Bank executed and controlling basis. Ladder transaction XX% our financing $XXX and we The our the these any facilitate of tremendous separately help use collateral. equity Sachs of net also on Both with contain The also discretion at transactions to term a non-recourse million We in a the mark-to-market expanding in loans debt. broad making does not retained exposure financing in of interest structure progress financing reducing Goldman CLO made modifications. mortgage generated approximately match

our quarterly to on announced paid cash Turning previously X. dividend, dividend our we April

make the and to management and board the long-term highest of Our remained which XX% decisions shares ownership company, or stocks shareholders. our interest with million the any and We of is best board in mortgage to of among continue will XX.X continue shareholders fully company own REIT. aligned of dividend insider Ladder over the commercial our

its of May. Ladder end the quarter typically second dividend near announces

forward our understanding evaluate important In and for the to be hand board to facts that us. that want so Our the opportunities with on the now. closing circumstances emphasize and to I withstand downturn providing continued an income and doing that priority they will designed at time look was objective to and to create we shareholders and capitalized I before Marc. to off Ladder

turn I that, maintain your for and With call Marc. to your hope you I continued now over health good the you thank support. and families I’ll

Marc Fox

adapt. balance had you, now billion of well weighted of overview new quarter had pandemic Those reflecting to and an and Pamela. first investment a of the March of ratio capital first approximately At totaled $X.X quarter. originations impacts Thank during during the of sheet $XXX of loans activities that the XX, our weighted on steps as value to average some I’ll XXX as million a taken over loan average COVID-XX points basis XX.X%. originations spread specific provide we’ve LIBOR structure walk the our through you

$X.X impairment rate $X With There of business, Ladder were $XXX of in in at quarter to XXXX. by impairment quarter. charge last loan third securitized individual regard the and of $XXX conduit million loans hotel XX, quarter interest an Nemours stood million in million which a The remaining was loan originated quarter previously was loan of At during fourth the million which of million to Ladder conduit charges the million on $X.X the of relate March $XXX loan million. million loan the defaulted to average our $XX loans balance $X.X X.XX%. marked Ladder’s year. of that at sold related

$XXX activity. securities backed at During million will they our of At of months. and acquired the offset XX.X% Agency Ladder grade, had investment rated together sales by that average million were XX investment XX.X% of stood AAA weighted quarter, $XXX securities and portfolio those of Government $X.XX duration amortization XX, a partially billion, March of securities by US were

gain core properties QX. of sold million comprised two $X.X and investments office acquired also Ladder estate in net small five $XXX,XXX lease building resulting real in a of

strong of assets ended quarter times. consistent of bond in with X.XX quarter at billion. unsecured Total cash $X.XX a unencumbered of billion estate reflecting Our and cash unsecured source income were ratio including $X.XX of to earnings. recurring an to portfolio end a assets debt Ladder flows debt total $X.X unencumbered and investments real billion stood source outstanding be continues at the

the as of Consistent loans. commercial plus with our including secured our end backed senior first secured investments debt mortgage were quarter Senior secured secured total on securities XX% cash of and of our by base. XX% of loans senior comprised mortgage focus asset the assets mortgage first assets

and secured stability investments investments reflect portfolio emphasis cash ongoing the to continued environment. liquidity unencumbered in strong current an and our position, Our on senior risk focus portfolio, in large our and on mitigate assets

cash Ladder��s with which the by uncharacteristically robust cash in ended X ratio result end and inflated X.XX million investment a over balances adjusted to first unrestricted. $XXX was which adverse high of to million off activity As conditions. election maintain leverage quarter to $XXX response Ladder quarter was balance market

sheet of moment, leverage cash on approximately adjusted unrestricted X.X actions cover ratio of currently its in and I’ll the As has approximately a balance result of million Ladder $XXX X. to an

ratio, be would the At times. debt approximately from netting by computed cash X.X same out

funds credit As Pamela on unsecured volatility fully the of The company measure counterparties as from partially in company’s with to back received million precautionary outset of rebates. all noted, revolving in facility $XXX.X the the satisfied repo of margin crisis. this timely the connection market elected March since at draw recent in down cash and form calls and securities Ladder the margin large majority those

repo to The to to and securities and of and marked additional company down shareholders company non-cash securities quarter the maturities March estimate increased company albeit million unrealized reflecting rolled securities the which XX% uncertainty At on CECL by of its previously extended announced at market billion an by the basis. $XX.X increased our level quarter end, out reduced end, X.X at times $X.X the with repo of maturities September portfolio $XX.X reserve further leaving million also successfully to an mid-July XX% value of debt out Ladder through XX. beyond equity

CECL declined of undepreciated in of $XX.XX of GAAP a to shareholders value billion resulting book item $XX.XX to XX, value $X.X non-cash and March As book securities of related valuation equity as per share per the and result share. GAAP

and be that also the take will likely and to advantage alternative in necessary Ladder recover. company financing the With flexibility calls to Affording estate that has allow term. begun near credit margin exposure real to and said, the the reduces that funding commercial of future uncertainty delever to markets

at approximately Specifically a point par at and million. loss maturing were four million resulting $XXX.X securities discount loans to in million in total $XX.X of loans were of $XXX.X April, of repaid par sold

executed and less inspections XX sale than reduced April, the by million property securities without basis cash of in loan to established the Also Sachs within new important to facility $XXX.X is executed benefit Goldman million financing Ladder its repo the were a million billion. of transactions Ladder $XXX financing with CLO $XXX $X.XX Bank. note on buyers. hours periods a It by all Coke the

anticipation transaction. we sunset proceeds membership of February In from date, efforts CLO our used and portion the of ongoing FHLB XXXX the the

by addition March outstanding resulting current and In since $XXX sales balance million. securities of loan in advances to XX from FHLB XX% reduced the proceeds a

issuance the point efforts at with to secured wind January XX anticipate average We non-mark-to-market funds Following and unsecured to recent flexibility. use funds debt sheet of comparison in December reposition increase XXXX. bond FHLB in our of weighted XX, million basis Ladder’s to cost down increase and our enhanced of a $XXX our Ladder’s weighted overall balance cost average our

million. by debt financing increased unrestricted while was XX% provisions hands this result quarter following our $XXX importance, decreased to $XXX been end, billion by on $X.X or of total to a by $XXX approximately has all cash As Of mark-to-market debt activity million has subject reduced equal million.

as experienced on mark-to-market to in market resulted Although in have calls financing securities that valuation highly basis was scenario timely absorbed debt remaining already of a end duration which severe in downside rated manageable the related March. Ladder that two-thirds short the in

also capital contracts comprehensive Finally, modifying headcount. and efforts reducing reduced to expenses address in vendor in preservation in a manner. benefits to by Ladder selected our employee

expect and large significant historical We unsecured is first to our primarily COVID-XX focus actions result face maintaining mortgage approximately pool and per balance in maintain the clear we while assets importance of continue the comprised and the equity of crisis ability strength year, on headwinds our a a of testament $X adapt of bond savings to related and loans. to to of sheet unencumbered million flexibilities our those to debt

over it Brian. to I’ll Now turn

Brian Harris

Marc. you, Thank

during and on economy. of subsequent forward to spread certainly the to of say the a as here plan some providing these US brought Coronavirus unprecedented thoughts to to shutting back As how I today about what you thought of by seat down our with earnings I’d we move the take times core our seem

reminding off background, we the Ladder of the concerned post And recovery has that me crisis let toward of by you position downturn. company was taking for start now way XXXX. of that the began its several fourth quarter quarters nearing to been end possibility somewhat steps for the financial By

we’ll in into believe had recession be a just we reason think coming, be might like the I days we While XXXX. no depression environment XX

January of to end mark-to-market as of At our corporate planning and unsecured of years facilities we global Pamela $XXX issuing the debt unsecured another looking the decrease late started our strategic as to of Marc bond negatively bonds of we overnight company. a began fund for markets make on, prevalent continuation a reliance into X.XX%. the and touched did use impact rate In repo to to our fixed XXXX, pandemic before eight corporate just seven-year of million possibility weeks prior issue further in

timing jobs prepared March we’re us we I for this month XX where today have well pandemic in million this alone. could fortunate last issuance lost the just Our enter in what of have experiencing over allowed the been into been global as in on to downturn sharp think a midst

management several attention Over the constant proven helpful times. last during to our difficult years, these be to very has liability

this from strength see economy impact and financial to went the ability downturn health this severe take on set into wide further the of we given position advantage strengthen took negative liquidity a our While the opportunity today. recent steps additional we decisive in of that crisis. We to our

our experience a our people team of experienced highly profile. execute plan after to liquidity plan watch to was It raise humbling

their loans, last loan caring current mortgage March our $XXX for during to assets million. billion to safety new our of express for numerous their history, the execute not Despite weeks. illiquid most getting facilities to the from home over single unrestricted first credit without position airplane. We this hand our process the of we a the cannot unencumbered of while in end loans. comprised have the paid families approximately for sell and were was of million also on debt, I’m able $XXX cash sell person of office down what capital around CLO, collateral Because all efforts bringing pandemic. and having payoffs, security market how securities, been Words on in grateful month US together and a of the primarily an structure seven moved $X.X probably cash During at

of high So ample our a the further in pay already increase unrestricted a when holdings. is cash one that pays our off there will to loans reasonably probability off result

leverage making We to overtime selective balanced a a with towards new lower plan investments methodically highly approach our manner. in

lot reducing of AAA pay and attention term of Our expect liquidity portfolio assets the further near this debt. in we short securities but inventory March, sales durations few next got from off over to a provide quarters

decreased is test them as and paying in of would likely inventory our additional It new that close that trigged million redirecting accelerating flows supporting to we senior to these pool $XXX mortgage anticipated. impact protect off increase AAA has securities note securities. the the I its April known in overcollateralization be default sooner of than securities, defaults originally will cash safeguards by

already We individual approximately given equity believe providing AAA principle usually losses with this the structure uncertainty extra AAA to returns loans tied the the the the on XX%. the overtime. seasoned XX% from own mortgage against that alone the subordination potential securities securities another short these in securities of buffer we borrowers by as Most an have of debt

while of suspect as the health we have As global into and the expect towards about future more move the at the past crisis prospects ahead. optimistic to been what to we hopefully, going than this cautiously most might more us I most years Ladder crisis. and of reopen tries look than in economy economy knows we’re this gradually none pessimist our

damage that it we’re whatever if to the economy, the into by various economy it overtime of And mindset like think amount our is stimulus have the to We and economic on economy the size restore lot support strengthen stability. of huge. The a been this been maybe implemented. prevail takes will seems stimulus more has way certainly the and encouraged put There packages somewhat sheer of but government needed.

helpful these real as couple think to assume changes While changes types to some very commercial has maybe of there home permanent for be months. one result nation estate. of many of staying in some property that might a We the

resulting manufacturing streets, see that the to also more of the movie theaters. and neighborhood some we back because and entertainment, large This to population for stores, years. learned we’ll chains demand integral an for return Zoom use with e-commerce being things at and had the brought march much essentials gotten ordering supply to using accelerated to group discussions, citizens streaming online As towards in scarcity stores in in more States facilities. we more and for have But in restaurants far United might the bode malls will grocery lives warehouse well convenient our than recent thought shopping maybe

When in begins reluctance the we’ll outside interest to the of with lower ships, mass much much normal and new prices unfold, and to the on be rates part the population airlines lower transit, on and the world travel US. gasoline get some cruise of

drive quickly think. and may doctors. as more hotels offices be as Business-oriented recover many conducting tap behavior methods medical might than less visiting have group staycation workers demand of thru meetings and to now able into hotels will alternative So adopted and see patients

properties mortgage in when March. middle the assets changes away the preferences to. years couple wanted able lending with malls. sell long turn This our Ladder quickly loans, as hotels, us ago, retail result market change mortgages Partly cash provided big into and locations made and in ago migrated these secured and office to of of multi-family we towards we A ability to were from for industrial strong multi-family, volatility a of the by and box

hope have sense a have we times, we today. we are optimism conveyed truly these challenging of While

platform through is the of years. to with to come potential navigate to over this become investment foreseeable couple in new Coke many Industries. of taken and space future. rich the us, the the what enthusiastic inherent allow steps our like us I’m very right relationship of have expect about a target the and smart our They’re recognize to they next environment of We in our strength

population our that get a point the through I very will out resilient sometimes US this. and we is to people

never a idea a economy at near of of scientists it in our and the complete have that point and and know we some will doctors. entire the of While a near we downturn efforts was Hopefully, the do have term. gifted what shutdown the seen end of as we cause some pandemic result global

and rates about thankful biggest hospitalization that fortunately Its mitigated. our have fears are mortality infection, We this virus. been

While crisis, overstated, optimistic us unknown worst always very the behind collapse and that let’s we health hopefully we’re is cautiously about economic it’s hope the have the so. probably is the are scary, fears also

and the Thank Stay turn operator. and we’ll back to call I’ll now some questions you for safe take listening the today.

Operator

question [Operator Steve take with JMP Please first our from Instructions] We’ll Securities. ahead. DeLaney go

Steve DeLaney

everyone. evening, Good

put First hope defensive than to done and you’ve all I’d congratulations on families other like other job are with, you good you near so, best XX if what is see your cash term, do couple cash to next the had near the a I than months? work money to term Brian meaning say days in you well which or opportunity market efforts. your and

Brian Harris

Single asset securities by double. backed

Steve DeLaney

[Indiscernible].

Brian Harris

BBB. AA, A, Yes.

Steve DeLaney

risk is downgrade the single loan you less deal, that in a and a essentially asset have you’re buyers because that’s underwriting And correct?

Brian Harris

BBBs they the BBB’s happen, that weeks it It’s the you well in that really what’s think There’s at AAA like player. the a exact - low and of Seasons. probably and I are nothing. be know XXs, hands the are point in those is low right depression really price. the might very go going XX% rally they seeing like be don’t you’re one We Right down from though now gotten matter XXs the what happens BBB to unlikely the the same just today. in [indiscernible] hotel on Four the if very so a strong somebody so if of owner if or $X.XX Maui strong opens Blackstone on hotel, were to $X, I a close hope into

and more than those think probably are yes will But BBB I pretty liquid be I these volatile others. the So maybe find assets it.

quick over got they to think the pretty hard. I downside

Steve DeLaney

And standpoint. you other don’t generally week [ph] issue going like is Thanks. it’s how just how follow-up the my is and on putting that. market to people’s in But this and possibly is in the the new think competitive in feels? know it GSMS for from you AAAs The CMBS, How deal reopening season TALF, I issue. the quick. comment market you do going new deal, a important sense benefitting fed new of Thank

Brian Harris

what you they a the the very taking safe I TALF take of of why they a XXX securities announced two by in over effectively is are they down is that It this think XX-year these points rep TALF probably deal swaps but that. small open offering, before hotels I to lot They little I’m not these little frankly the went real point of removed did come. decided lot think assets. a at all is that and deals. the a pretty they’ve surprised The CMBS. to current commercial blowout has trading them, But AAA also AAA XXX when at in unmitigated sure were dawning business. I’m at estate is [ph]. market and it would in over. from to A TALF

times their they collapses and bond were think I And XX tightening them. those this done, morning on

So portion of But I I don’t it they’re the this say XX-year. suspect XXX, all and that too for because this deal think on I it. at to [ph] down is but of of I’m part all XXX at around because AAA think is not a can XXX get I much going the future

it. the you have whole not when any on So at you on make thing. part of TALF is helpful of very I - the some loan helpful portion other it’s while to And think a all the anticipate AAA it,

Steve DeLaney

the comments. Thanks for so much

Operator

go Please Jade with Thank question you. next ahead. KBW. Rahmani now our take We’ll from

Jade Rahmani

or Thank $X.X everyone is, $XXX noted $XXX securities, the the from much. other million me, and make adjustments million, so was and Glad current could $X.XXX some mark-to-market? billion of April hope to it subtract with you Starting what to well health. respect safe good the X/XX billion in at the you with give securities you value and of we very doing should sale is the from hear

Marc Fox

Yes. That’s Jade. about right,

$X.X Something about billion right portfolio size now.

Jade Rahmani

manage Okay five there convey times ability of and just and is to in leverage you sense leverage? your against can that approximately that the confidence

Brian Harris

I’ll let leverage. the Marc question answer on

that leverage. can that manage comfortable We’re we

little a seemed very - stake overlooked use be said AAA we’ve leverage leverage there. think I company the is we in the while that got and on securities more we that always little everywhere for to else made use

receive would had to them. did overlooked were we that problem we seemed have I expected be bit a calls than received item that of market So another little no the And larger I completely, think however with some basis that which an began. a is six last this before problem we had million on from offering we like just day bond have that weeks unsecured did settled $XXX January that frankly

by what did So have you money we the times was trouble think question weeks? with a few margin people do in when calls. I My is, you six meeting asked

mortgage. as complacency, AAA Jade, that know XX-year a in think concerned that a not rather cautious as several now two-year getting the never of quarters volatility think bond somewhat been problem coming. saw we ahead were is thing just for I’ve I you about But potential involved a the in So this same I

get I’ve on And non-investment problem. were discuss been looped dying securities I use with believe could so a non-AAA meet to call were thought unable or dated that or margin that we being financing into and organizations this we not only Frankly anybody grade having were calls. a repo that because longer to and

Jade Rahmani

learned. over So just it’s going lesson

March open test up, to to of in that through make start repeat repeat happened doesn’t We itself. in what say cities for open start and sure there is go resurgence to use April, up stress same, a hypothetically States the a and Coronavirus. it early Let’s to could

Brian Harris

used ever we do. because now use deviation standard March going what yes the far with Absolutely comfortable right, third had quarter? XXXX. March, I Were XXXX volatile in my use was more seen we the it to of I career. in No. But was end a at XXXX, than I

to hand, it were five cash hands were like other that than times the in a more our point we it I of we period we’re On problem now if time, to when when happened that didn’t to out happened. we return would and have

the yes rest world of So felt portfolio place if addition of volatile is, of for just $XXX And lesson such in happen if to were I pretty short it. again. were priced Even to of a of because million, believes we we that done mean the we any downturn that safe, going carry was kind an it and terribly offering of ready had taking that to securities. you’re though not they’re great doesn’t believe think cash more and

first in shorter these just four have months like only First said people they’ll of of differently. a points even fully understand be or as to months it and three now all from mortgages assets in are should XX now we But perform and don’t unencumbered we that, Marc months average down a at better about that. they’re It’s smaller defaults is bonds loans. real than marked maturity that. addition have portfolio, also four These And if in point. so more lot this there from

cash and there non-performing sold $X.XX any the for we billion, million did we loans apartment We and some not loans, have non-performing were that sell some while we’ve did loans. references sell $XXX in by way

sold office We loans April or property, visit in and loans from and little people to on we not problem was we low very were early get our largest had them got a got an prevent maturing loans apartment coupons, that were the lawyer’s able some some airplane of and concerned to and were this they off. a going volatility paying to and maturing perhaps

sold we case all off. ready to paid didn’t loans some cash in and off pay So they get they

some off some and on loans sold we sold got paid So we we assets. securities,

heavy will incredibly in cash throughout were of we position we most But lesson month. ultimately, - the And yes, learned.

on cash carry it. will hand. wanting size, more get it out absolutely the securities of having We go that have We’ll than - portfolio with to rather and

Jade Rahmani

- the you we think that of just ones Do quick take is? per subtract current I questions. is just there said have XX.XX estimate more or for undepreciated value many and two apologize asking [indiscernible] $XX.XX too share, provided at a really need believe that book $XX current I Okay, million investors book which share and information. you $X.XX is But so, the a loss should I the for what of million be about a $XX.X you value

Marc Fox

seen of of the to took a I that we to want that this estimate. the say you improved not far we that point, at I the would market at end think But you’re fair have securities going some so off. back. mark be that that I if think somewhat that that’s quarter start come could

Jade Rahmani

you of can the FHLB? with the that just Are you or amount and outstanding. further balance current comment of further will reduction comfortable You finally, the you the balance to likelihood that? looking reduce and on and noted Okay amortization sunset and down then

Pamela McCormack

Jade, is Pamela. this

I think as you know our membership was subject to February XXXX sunset date.

we with sunset, our over million to borrowing further non-recourse doesn’t mark-to-market billion provision. efforts reduced in at an pending mark-to-market peak past X/XX. of that reduced debt anticipation $XXX the So replace debt recourse years borrowings the to gradually our of $X our any connection we Since to then few with contain

Jade Rahmani

quarter? during the and Okay FHLB will is margins the of significant sorts calls

Pamela McCormack

have more not I of protected that sort mean from No, they us that. concept of overcollateralization an really.

Jade Rahmani

nice Okay, speaking you. thanks for taking the and to questions

Operator

question from with JP And our next Morgan. Rick Shane

Rick Shane

Can me? you hear

Brian Harris

Yes.

Rick Shane

like Okay. more than weeks is I from, sponsor there determined a we emerging we stage lot and likelihood in spoke. behavior going stages. be of hope about outcomes all we in properties. doing eight everybody It transition to it [ph], the ultimately performance think I see by just there’s we’re is underlying then a liquidity seems going the secondly where to think phase well. be Look are the three ago, all There’s that when

the portfolio, that highly feedback sort breadth the with that an enormous where and means your number are were granular. of discussions But What Given attractiveness in also that getting you of you’re of it’s sponsors. your concerns?

Brian Harris

think and rest April have shockingly in because Well collections good. payment phenomenal, early then that it’s were is in more mall May expect the be We mall still, will have than naturally fine. it as and one loan of the a little early missed And we were operators others would well but loans, problems mall. with here. completely I the them conversations as any don’t own to hotel I

some general so the have nail filing to don’t have pizza retail we they because the a going store, to And probably names also they’re may frankly rates place, they big reserve avoid the retail had [ph]. that’s forbearance see and You’re reasonably into get to going neighborhood just salon, as the have don’t know just as calls. should have not some, work and payments. low. are there, thought to I because meet would if many But to Interest it I trying conversation

look the when is where portfolio I confident which loan I question, about me. think really bridge just you Our asked

short, that so our are assets of I transitional We we so of book get to a scenarios because floors that’s transitioned we XX Maybe X.X%. especially months our are cash lot believe over concerned. of have keep XXX with right more began little things to where LIBOR a a of our lot loans do seasoned this about and ago, at keep a lot there flows, now in little high and close things we already floor point. a are

in, the performing So able put the how are and really that refinance tenants they those question will be they us out. are

in you. into tell hotels take fears get I’ll But conversations think My - So retail. I you mostly and the should several place conversations. could

very that friendly We they to with want very, capital, payment, organizations have indicated make wealthy they have a plenty also had that some not did. people however might of well-heeled and

stages three So at we’re the look that bit you the little I too. dealing a But of way also. do

think I to was quarter what you’re don’t know Liquidity think because I first was event. if Jade all, back rate that I here see spike. asked, going that infection that March a first just we’re was again of

up chance forced more forced lot looked to got and of now at will took to deal they’re a think right that ready more possibility what too point. people I with a I lot become and think this I for and think selling place like don’t many everybody sellers and that

changing lot And then, There’s don’t dealt basis optimistic. a real points. I’m plenty restructure more LIBOR and prices hands ad that. the little I a see before. what’s anybody that with happen into this ways who don’t point. of yes never if get knows going interest energy you to I of knows down. I I know next to estate at see and see XX rates, at We’ve reserve.

interest rates second with so that’s low, estate so real carry can the You phase.

right And screen will the are I don’t opportunity the phase. and you on They say get lenders world the buying the opportunities in know sold. then be But to short-term would think you make I might extent great because there that breaks the phase don’t I the and some real want sense. bond opportunities. because now to what’s really there down coming. relationships don’t think charge third always be some start things between estate out the owners

opportunity decided it. a government a has a very things actually while, of to little come right I think as that said, opportunities I like that of on for than to that lot have be going the now far, broken AAA lender lot cause a we think is so be of seize purchases also real to hard really will an out debt lending think being estate CMBS it’s better I some However time to in so think restructured and little finance because I a it’s you’ll I and and to

recoveries. recovery. it and But downturns could seen We’ve be quick a

where the I so wanted and could word something, might up because back were. we to in next going do I’ve in done to think before. think year, be ahead. we’re be never if - Pamela TV vaccine little I think bit better most think. that than Pamela, here say with we’ll But screens dealing I I’m - it we go the vocabulary shows anybody’s here don’t add this go

Pamela McCormack

this have at to I is, you the of close of at discussed Ladder that add we which made there terms points to our loan any assets when was one and look a level. just overlooked book, diversified XX% believe the loans. some are model relative during I’ve think we XXX%, sheet of All our was really balance of the I AAA going have credit to in who peers securities enhancement business and And

But thing say conversations. we loans. limiting else like last the doing we hand-to-hand just combat And are everyone on the I is would are

a interests there’s place talking of accommodate to in that. reserves deferrals and about of You’re lot

it the does go today think everybody how for nothing there’s question is long on. I So just

Rick Shane

that’s the to that they think are the Got little it. comment seeing or agitated borrowers indication a made wealthy strategic think some that’s of I’m you And do thanks Do you an curious sort rationale Pamela. And fall? bit. brinksmanship

Pamela McCormack

I can think that [indiscernible]. fact the they

Brian Harris

its brinksmanship. I think

Pamela McCormack

Some results for loan XX% [ph]. that but hopeful book a so last that’s quarter, was of paid of our

Rick Shane

much, okay. hear to voice. Guys you it, nice very Got thank everybody’s

Operator

We’ll Hayes B. Tim take from FBR. question with Riley next our

Tim Hayes

grant XX% in taken initiated one or first real were actions point? curious you portfolio many borrowers portfolio mentioned if current borrowers and of forbearance conversations or tenants My And the estate what requested you relief? have just some at that outright I how But to the know I this have in loan April. Brian any in

Brian Harris

Perelman, you to on that that information, defer don’t Do Rob phone. I’ll runs He have Management. he’s Rob? I have the Asset it.

Rob Perelman

book. I’d Pamela say across a But the with about request situation. made - we’re as have dealing loan XX% on said one-off

Tim Hayes

types or principle of could And of structure tenants it. of periods deferral borrowers reducing on these kind some with got of it’s if the things work from that? touch of a Okay, you in anything high maybe or kind that or and provide order considering level you’re some dealing to interest or whether loans relief rather like

Pamela McCormack

So we’re everyone what talking right. doing about is else doing

of further the nothing discussion this potential and reserve in of use about a point. deferral only We’re at interest

Tim Hayes

Okay.

Brian Harris

loans scheduled Tim, of to look we We’ve so point so been pay - far Yes, asked that couple they’re statements. a so paying would they like off. maturity have good this also far, month for I we’ll off see that count. and on

Tim Hayes

government some many other impact usually then program stimulus credit Brian. for are estate thanks update, of good And outlook on in how portfolio significant or a That’s real how and would have for eligible the tenants? the those either PPP tenants for an

Pamela McCormack

today. don’t apply to We have a know of trying for sense a great number we Yes, borrowers were it.

our color more little a date is. I have after think next X, we’ll May it payments in onto that

Tim Hayes

lot spend. And top - can if it. you level, from you is I extra of a you on know had kind dollar of know Brian what high of But then in there’s Okay, mind touched got capital an in terms year? I deployment, course you you on one just ahead. But can of which be touch the market and a comment the net the on do capital net users expect and uncertainty different of segments over providers your will of

Brian Harris

reasons It’s don’t stop big. here. the aligned question. Coke these that I’m opportunities be very of opportunities. one It’s happy divulge with want be everything I a will Industries very people of think we’re to I some cannot because I that the not know It’s I thinking that seeing somewhat don’t know to answer. tricky the and I

think money raised. I there’s being lot a of

business money the back to to it’s make big business. as about don’t okay. of conduit to and if in yield. you’re little Like I it I go It’s if get it’s I a things. you a at going if going I and time kind money all might AAA hard might But does know might But lot how as sell that untraditional be raised. to come think X.XX% XX-year securities that in of think doing So a be think, get

business you a to a lot suspect if might I borrower wanted better money. in make of that you be

a real the a equity and estate. real in show like estate and of up taking providing pay I lean form a might just would of any So towards that’s an things kind in Especially problem us down that debt a on interest having kicker. mezzanine somewhat

I of a is lot good structure think, So finance possibility. a

of of On mind out not cheap. ridiculously the tell are screen my securities and borrowings I would be think to I you, that some our

than seven more we prices amount. if can’t next debt out some I the retire So figure the I of have cat if to this situation out we sure money letting bag to that make over of that the like we’ve there. to at assets, years loan some maturing taken great got will a how occur, make think don’t makes that funds to I’m of steps a the a unencumbered of same has were Ladder and lot and

Tim Hayes

then one it. question Got That’s me. thanks from Brian. And last helpful,

the terms is I if that If rate more I’m of then when Coke stake negotiated little you X% facility. the there is facility. me bit Advance is sorry it entitled missed a or provide at price the detail to spread assuming this, And could or just floating a rates with but on Coke market? acquiring

Brian Harris

to, Pamela, I’m mind. if going you don’t

Pamela McCormack

a on ways as really to flexibility a in So the can give I tell with best to has our months. of getting non-recourse particular the way of lot Marc across the we Coke it weighted can deal few think and and loans of renegotiated I manner, as shareholder the can you, insurance it of is over flexibility to many sort early we in you crisis funds, think line it’s we average Brian and blend But as cost modify loans. the match facility is, last for protect the mission just said in Coke have a value. took the funding And we facility in

flexibility terms So in was of there’s a intent best interest lot and the the that of in of making of line. loan modification the

Tim Hayes

Go sorry. ahead, I’m

Marc Fox

weighted when say, to the $X.XX and say, months at The funding, of And financing the little we’re secured non-recourse, X.X%. billion the $XXX going Coke of course parts cost that past financing and as flexibility of was talking CLO elaborate is Pamela you borrowers. arranged. average of non-mark-to-market, of three long-term look I deal million net and really we’ve the done And unsecured. that Coke bonds, between over us talking in deal you’re above and its we said that the The deal. about CLO about

really lot So ways strengthened I in think there. we’ve ourselves of

Tim Hayes

there, with thanks and [indiscernible] agree the that Marc. would the I cost for on

Operator

James. Laws with Raymond Stephen from question next our take now We’ll you. Thank

Stephen Laws

guess I on bit. the to Clearly wanted a of little comments. is to continued Brian, have follow-up balance previous couple leverage and a securities down, I sheet strength your decline

do repurchasing should with executed It’s since I your the I some question it, shrinking that to view other way going information earlier. you’ve to you the are Jade’s it’s starting we or really the we look see you want today in think stabilizes the whether weeks expect $X.X debt. attractive billion, portfolio have loan sale, do think you Marc portfolio deck. it mentioned the some where of things In continue it see before to coming kind in to where

as there size. As that. options can said the kind I you think about, about some do know think how we are I mentioned you realize morning? tonight, how But do of change tomorrow everything portfolio you

Brian Harris

designed completely to was March. may to a way in you liquidity be have it always worked think I source a tell of It out truth. not the that especially

keep not doesn’t And short, lot attention. it of a require did we it hinged. However, if

that probably it’s that I the fathom I return And have good. it, that think the about money the I return principle. of get I no of where side thing it one scenario can that say we of on, principle. do we the money don’t on can’t about doubts is

think months they on I they’re be together these overcollateralization CLOs, portfolios true financing old, this speculating next part. place kind is I this think my fully here, of understand store the put tests But use of though and I and don’t people stay even sales. couple [ph] and could that over I kind wrong take of these think day

the if So of lot transactions issuers a way. look by the fierce take of are them a these at of some

those originated. So portfolios it’s we on lot when goes pulled a of if a they’ve loans and and the But portion everyone the of AAA gets bad one time. then CLO. that out gets XX% put a But loan loans typically if in, go managed at bad

to hundreds from lot par and non-performing of I think a you’re of millions writing going removing the loans of of have to loans conviction at start portfolio. new

these think actually they floors which the these presently triggering flow is of zero a So lot bonds, except a goes the of LIBOR. on floor loans of cash that a forces. will have The to have bit you quite I which money sponsor because if

grade so So of coverage and LIBOR have coverage that’s CLOs there’s to have XXX% so fallen another and test low. the designed Most rates. test these the has rapidly of XXX% of and are called coverage bonds investment those because

$XX you in default days goes loan. and very where if do transaction. most And we overcollateralization that delinquent, one if is in, in loan one a have So look XX kicks the there’s at test million a just same trigger margin if the

And happen away. it so right think I won’t

in you’ll may try you stay see to XXs start economy and maybe start go open see of do and in XX-day some May, and of think some June doors I we But you’ll repair the some well. done and if in the it delinquency these game. seeing to the pools doesn’t work

be will of flow the balances. the will right replace overwhelming hyper that will they AAA won’t a a restructure them and point send to that to of think amortize I lot them hell cash able to the the defaults where that and or be

not we and periodically. would hang mode and onto market. So we’re We great. hang kind a XX we on so with in If see functioning working it. wait It’s months just to, life. had do But here. a not of It’s average

I still hand to model, On like and a and think a and I - do now. bit see we of get happens on outside. we capital look the with is hands it to have my right other it wait something where when what would everyone But goes see take

payroll been plans, cheap, the if lot but people are in protection of it looks that the but are. a mean, restaurant And they like if there’s the doesn’t and restaurant getting things gets evicted. a And sure are paycheck

I think there’s another shoe there.

don’t not So our we target-rich this composed. is like lot I much that the of way earning like position of particularly in carry having portfolio environment. a a

So them standpoint not from of just about and overly those becoming a it. happy performance certainly But problematic the with to putting on I’m balance not my own sheet. worried

Stephen Laws

mark wanted That we go it to How can How touch or view in the today’s confidence of down. of recoverable leads Page portfolio to forward, March our value potentially next comment. of I X much you’re should unrealized we forward? base, to book given guess question, Marc. I unrealized, [indiscernible] book of Which as swamped provides that nature reversible the the value a include lot much in move as its securities,

Marc Fox

we taking reduction quarter ended the the value that at a $XX.X so Yes in up portfolio. of million end the of securities

portion. realized to recovering have be that it, recover which par the to a clockwork [indiscernible] it we they going types not rather and And amortize, duration if of short million that We The crisis took they of could recovered the of rapidly. so will were $X to so par of around in are securities, saw we’re $XX.X well. we that think then sales as those losses amortize in securities return as course these I $X at or like rest million that we’re going of see million place rest valuations

So We we’re pretty wait optimistic. got see the and to what does. market

million. In of was is was of with that it X, into on obviously it rest part terms we CECL the book of which the value baked $X.X initial Jan CECL and reserve added

that don’t also another through the of so had forget that that had $XX.X see on But that the million You’ll ran or in that’s small portion also that piece. then P&L just the chart, we fact.

our impacts a of non-cash quarter. the So lot on in first equity

Stephen Laws

follow-up I think your FHLB. on clarity the network, quick intend Will But appreciate a Yes, $XX lastly, related remain Pamela How the just you there’s to to there. on you to of membership one I assets member position? membership work that. question around that sold wanted facility And million the mature, on balance do FHLB it that sheet? does stock your of FHLB

Pamela McCormack

we to The is, don’t have every REIT membership option answer will the terminate. member - funds five-year captive [ph], like either. The do it

Stephen Laws

about talking you’re stock. But the

Pamela McCormack

I’m full return sorry, the get stock. the stock. Yes, we of

Stephen Laws

[Indiscernible].

Pamela McCormack

by down We of the we end of back in we it it when the pay stages will back get facility that get pays it. and all off,

Stephen Laws

It’s [indiscernible]. Okay, Appreciated. want what I inflated.

Operator

Starker JP we’ll take our question final And you. from with Mark Morgan. Thank

Mark Starker

guy Brian, bond go you the gets Okay, But last. with the bonds are here. that agree I cheap to

You mentioned mortgage the commercial orphaning market. of the

health the maybe Is private public or government are partnership? PIPP expansion to fed help? some So the - treasury the listening. should investment see, do or like of would What Brian? to sort it of What

Brian Harris

last the not Well south, a job sure a do it what elsewhere done areas from why done What actually the to on has willfully I but segment really such we to do like we’ve from corporate I’m government I overall. there’s real they been they departure out. almost should have purpose and around stabilize go all because that mean estate bonds. of think commercial feels radical good pretty I been at think

there I think you United lending CMBS get that should investment and CLOs managed itself. States these or in started not that sectors will grade, take not unless because the and corrects they is financing in whether financing situation problem they’re

condition going you XXX didn’t to because units C what bridge housing markets support get appliances take project don’t had a XX% you’d the think regulation. a this is rate this want new the leveraging with your multi-family you is now and tried mind to in Class of to loan out of floors Banks business be it loan due we’ve upgrade a to right through you Houston And air on plan of understand is, and the the have bridge at write to with to market. unless new and market new want I that to really if all. all and and

real significant XXXX cry ultimately downturn the a banks sector big this on in private lot of own was refinance the into proportion estate going wash be of at assets its a that to of is And these will more it’s and is because for rest and some there. investment a there not commercial for market If simply the there point.

how but keep they these LIBOR waitresses employees rates while. But paid, at Now as I the for a and you’ve with out doesn’t think to the you don’t can said that open it’s lower checks things counter if I to gotten very figure keep carry fine trying helpful little people. that’s employer to bartenders,

don’t I why understand mortgages. corporate lack in also they’re think estate, are secured loans understand mortgages, the that and think a I think they is don’t CLOs I world understanding there and are and that real of or believe they AA that in levered that taking them. don’t of tremendous real BBBs that of anything don’t backing bonds not commercial CLOs are ETFs They world have unsecured junk So bonus estate. taking A

trade the that, is people. eligible help at misunderstanding dollar that billionaire people wealthy get it’s a single one other pension buys of XXX building access drilled the And think they’re fund somehow is a only those and BBB and that’s the the $X.XX I owns helping gets bonds securities that the unique And REIT. and on word the and the (k) the wealthy

that think it’s it is class. misunderstood but I or if know I a has not been and So an orphaned don’t [indiscernible]

it. bank to that CLO, but only make because it they in under AAAs credit all help was take was the to then they and their fed made and borrow which dealer primary interested York top to upsizing the eligible AAA at was move CMBS, first helpful so positions all efforts weren’t and could and the in New was that to not a Their expansion CMBS facility AAA their one

the So If mortgage real I commercial they expand they we’re very that this. think estate have space. going in should to debt high cost don’t

Mark Starker

you. up little less billion when Okay, $X.X we at gears X Page towards hotel half into just unencumbered that the of skewed use. loans all And than are down It the as great. little about talk and retail and to drill assets, deferred just shift deck. looking mortgage mixed Thank and want more bit so slide is a

You up XX%. add all about those

comfortable can you types? Anything to skewed loan quality loan there? the being those bond towards give risking holders how about value property those specifically loans performing So or of pool unencumbered can the and us of sort with get that

Brian Harris

they’re mortgages. I Yes, think first first all of

much finance so as land always end or with addition we is of lot So test time borrower. tail and cash asset and unencumbered our had loan. a is a comfortable. would a towards we pile. or ours mezzanine mortgages - that I’ve That learned are to over that of else a say they These want want of fund the rock I first by somebody fact lot years rock called But skewed of loan and a bit were people be virtue as to the to little in things in mortgages not opposed finance we didn’t corporate lenders the many first about role new something that to And I’ll pledged a so in more my to conversations be pile. get

an area. we people I many upgrade carry are think debt that to in what that

Pamela McCormack

the only –gave look would thing other in unencumbered this, just I that look to on would I not, unencumbered all unencumbered that, else of is, state. a superior spaces unapologetically when asset and unequivocally at at to and that why I’ll think to you lot assets add everyone add the say has Ladder’s I we’re

mortgages. first primarily We’re

mixed off It We there’s $XXX only billion $XXX have of over various $X retail million multi-family. office a mixed like million million, million use, a of $XXX instead and in quarter and $XXX is motel.

liquidity interest would liquidity. and CLO my we feel pull mortgagees want equity talk there. primarily. CMBS in So Retained I positioned when say These out. and first I to hair well and are is people not about transactions cash really

Brian Harris

loan would XX-XX tees in is this that off pays also that Mark, performing chance problem well. point out that of several at loans when of quite a seen Ladder in and is we’ve I group

anyone pay I suspicion going the new portfolio that that the So know they’re off to below over earlier against about he I them that month neither this one assets was might we encumbered talking two problems would there. understand put unencumbered I I so assets like while portfolio. be are hiding and of loans a picked have up that looked certainly else

Pamela McCormack

just point. Just these I add on XX% one LTV last may and XX%. one The thing, if between are

equity a of big a room. cushion have lot We and

So I rate would about the alone is, think about again proceeds. them the them portion way of you nice would think I a product produce if sizable advance

Marc Fox

if have that X.XX unencumbered that, of think very met the very, come the you if from of with a portfolio at side is, I goes have deducted what that when looking same statistic there. the would And test you’ll had unencumbered that be deducted you remainder ratio ratio that, and look basically at to the what see X.XX meet. that you to another of the you always cash do asset what you requirement and you’re and that’s times we’ve the pool of page which for you meaning quality seven X.XX Mark, high has by meet actually cash up asset from is out that statistic and you and figures supplement the times.

ratio strong and were calculation. using we always into time ratio is for the That looked a assets. had the of ratio very, quarter this calculated very we within that So we X.XX we’ve and this first debt ever unencumbered and had

it it’s when cash. at got and I’ve big a say, loans the So very I’ve you and high got amount it first mortgage pool quality look of

Brian Harris

And mortgage interest. might perfect terms it to the us not first and that it and be writing isn’t It’s to foreclosure something big take just our out collateral. take on we as a checks B. mezzanine go wrong a go or that, discussion and but result B interest to then you’re restructuring of straight pieces not don’t tail goes requiring have with because loan loaded it’s if

Mark Starker

great. you. Okay, Thank

the you getting covenant coverage then go obviously lower last one asset just X.X when you so in sneak wants just around improved me that Let unencumbered But threshold one, cash move some –back can was to cash was to know I and times everyone home. close things forth.

the cash this for going on to play running now you about Brian versus happens at to coverage pool be when excess this in unencumbered some do trying want obviously something the this So we excess In defense? coverage the times X.X pool. you think sort that right don’t company case have maintaining just cash you back to offense of we look here. How of and encumbered at of

you will do how do you the as to reserve, offense much how today, much and about think play So capital you can have need if you we cushion? how

Brian Harris

want can XX% of happen. to, generally again with, I think callable we anything thumb of cash carry rule because that walk around about want we anything to our that’s in

way So we’ve than that. more had

However what doing just DD now I of very back and same to large time, on today. scenarios given scenarios knows buy on do right current your there petroleum corporate some the to going at a our what’s would lower necessarily the But think oil. sector sale also Who you But with are do in and where of capital. tell there not that, it could market debt the gain the debt. is exist you having here a space create lot I having that with in is

to So that’s we look. something have certainly

I that these easily, In of with. of addition sell press want if that should we hard out we have right on would But a figure be [ph] that, it. can take to we today AAA, of would loans done to securities say financiability securities. to CMBS. some than other given complete because haven’t writing lack we we now to we loss a if necessary associated But that’s convert we small these of think don’t a lot the

And but I writing. it’s lack complete not very wouldn’t say comfortable

of bit banks have gotten You little get but that can’t business some squishy lot it. at a this around a in point. return They it, may to of them

thing pretty lending I think borrow and think to low banks the into I way probably and better really interest do rates anyway. So the to with we is borrow that’s money conservatively space

uncomfortable So that’s not us. for

the improve to that that estate [ph] So that I see we have to can the in offense helping and door into debt offensive take and that or get I game kickers would problems people into would we think nature in mezzanine. of the such But the will other be real possibly have But couple addition of million try of what’s loans Armageddon of over book that think next an happen because scenario somewhat. short we to let’s to we those. any say, $XXX we loans, still but going hardly bridge go not about and let’s years, conduit have things

this of mostly out transition. with through We rates do low its and very our come bridge interest portfolio is

have construction been not have writing bridge aggressively loans. We don’t We loans.

lot going don’t have we the a future whole door. advances of out So

So gets as will the And pretty liquidity off more where find what cash because of unencumbered to this we’ll borrow will tends we old, here. some have pay and assets stay to pay creates is as loans happen or that power. stable off at offensive security and

of portfolio. years cash for investments. the nature think $XXX high start several with we we’ll our excessive bridge that the liquid more the little that into cash be probably can waiting short short-term next and we nature will But in our floors will of of always and new and So in provide March our should taking given the that’s do certainly things. and think portfolio We carry and securities in lot that bit than some carry plenty a over I octane I million and us

Mark Starker

appreciate for Okay, it. I great. Thanks taking my questions.

Operator

Executive call Thank our Q&A concludes to now you. the I session. The Brian will Chief return company’s That Officer. Harris. Mr.

Brian Harris

too. that lived that, call, I this I’ve was was I With a the think as through this longer know was quarter longest ever but

not us you information a you I like when I But really convey I that and to to. today didn’t to that lot a understand thank wanted of apologize being could for with on will we time would our So we you at lose minds.

nature XX. was January we one conservative left out I by the million raised $XXX was everybody We and are think factor on forgot,

how to come in just we and press outside be we back soon. go that the I see mind right you when how where All all look keep running stay that out, articles Maybe thank can’t some and and company. about sometimes just that to basics forward figure hopefully safe they out talking So from. of the to so go we’ll again, you. and you come this

Operator

Thank you your for conclude today’s and participation. all does conference. you Thank that

now You may disconnect.

Ladder Capital (LADR) 6 May 202020 Q1 Earnings call transcript