KREF - Earnings call transcript Q1 2020 | KKR Real Estate Finance Trust Inc.

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Operator

Good morning, and welcome to the KKR Real Estate Finance Trust Earnings Call for the First Quarter of 2020. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Michael Shapiro, Head of Investor Relations. Please go ahead.

Michael Shapiro

Thank you, operator. Real of Trust XXXX. KKR the call the quarter first to Estate earnings Finance for Welcome We that recognize these are unprecedented times. all that safe hope of your and We families and healthy. you are

call recently Patrick expect, CEO, our are our bear could Nagaty; Matt Vice us experience am Salem; Today, we Mattson; President of Mostafa the technical should locations, and phone joined you As on with hosting today's the our so Chairman from CFO, we appointed Chris to to contain earnings are like please events certain difficulties. I of performance. the not COO, I investor Lee. any and various by on to measures our remind Board, also presentation, and we our everyone are guarantee do future figures available on website. GAAP that supplementary will which release certain non-GAAP reconciled of portion which will call, refer forward-looking relations in financial call our or which This in statements, the the both would

Please related to refer for cautionary statements. recently factors most to these XX-K filed our

want provide I of I a two quarter. note our brief items results, recap important Before this to

core reclassifying First, simplify our by look as we core our to net may earnings reporting statement you income have as earnings. seen,

quarters core earnings to and the and Our numbers XXXX going net we and this earnings will quarter in prior. core is forward be comparable presented in

of expected XXXX. for prepared losses more credit X, adoption current on share or that the on reflect similar-sized in during us effect information the nonbank went will his standard Second, into our public remarks. financials Mostafa CECL January CECL companies

included of loss share per of $XX.XX. per impact share XXXX, per or we of $X.XX a from CECL value March CECL. XXXX, a $X.XX of Book $XX.X which $X.XX earnings share. provision Core $XX.X per $XX.X XX, or million per was were million million per first net as GAAP the $X.XX share, including the quarter or share For had

cash turn like earlier the dividend paid that to With now with over this of $X.XX call month, quarter. note share a to respect to the we per would first would I Matt. Finally, I that,

Matt Salem

Michael. joining morning you, Good Thank thank today. you us and for

is health our of all Our and safety the stakeholders. first priority of

While we by are have and COVID-XX have pandemic. thoughts you recently, prayers who with you those many been our and all to the spoken of impacted

Our continues entire remotely team is and be to efficient. working highly

board Given we lenders the ensure our recent proactively volatility, borrowers increased and of members, and our with level communication transparency shareholders, potential have address to issues.

Directors many to past with joined like for seems inception. it months has my announced the its that partner our While Board we as quarter of in Lee Chairman. since now, his Vice I this business, KREF Chris leadership want Chris ago thank

stepped to of as We Also, with you IPO to from recently We we our all the Craig Craig, lead part McKenna Chris want and investors. Blanchard strategic down transition, from work closely will and Makena of his board. to best. investing the one our initiatives. wish of Craig pre-IPO thank on the for board since for the being continue all leadership thank

company the ago, our been liabilities. focused assets Since we three managing conservatively both across almost have years IPO our on and

those traditional $XXX lowering on the diversifying that been have our increasing liabilities, market. the of to from risk approximately while of cash company non-mark repurchase by end, quarter bank funding million facilities of we are including our As million liquidity, $XXX laser-focused away sources had profile approximately of and to

was our end, financing quarter of XX% to secured completely outstanding As market. of non-mark

of for estate us could our and none an later was cycle. real While economic portfolio stages pandemic, the this of predicted have purpose-built

loans real and quality real in estate the our sponsors. estate, are markets strategy well-capitalized, the million, Today, of is the average investment most conservative by on is primarily on owned of size in U.S. loan our the liquid in top $XXX concentrated lending markets, market, high-quality lighter Our the located transitional segment located XX approximately institutional XX%

portfolio first senior XX% Our is loans. mortgage investment

represent portfolio office, largest and are XX% of multifamily the Our collectively. exposures property-type two which

affiliation by In properties. A not through growing benefits significant and comes Also, XX% of and integration, the office addition, that only but stake from shareholder Hotel its of properties estate retail alignment from XX% our represent integration portfolio. KKR's X% with multifamily secured KKR, loans XX% with the platform. KKR's of ownership and the Class KREF in the and only through loans our company real are

global real controlled $X of billion KKR's under As $XX of U.S. over billion assets approximately management had throughout real the estate and year-end, of business estate

gives broad a range estate of across values and markets of trends portfolio estate equity us Our real and and differentiated fundamentals, view real business credit a extensive across plans.

three Turning for loans originated just the totaling activity portfolio million. $XXX to We quarter. over our

these March during prior loans previewed fourth-quarter call. our to earnings of and All closed were

of market As more volatile, the prioritizing preservation amount liquidity. the our became we began of high

turn to the me over asset Before our call on a I Patrick, few let spend management. minutes

our portfolio, to assets. by not expect unaffected It to ability do in to impact manage COVID-XX. be completely underlying than of more the important the is While we and we experience confident ever remain have

Patterson discussions, As Chris years management experience asset XX management and very oversee a managing responsible of for our is to Christine asset of our which over hired to our brought active. reminder, we have all team sponsored XXXX. activities been in

frequent This larger have have XX and borrowers loans. loan the a allows on portfolio to all with the segment we focus of manageable efficiently. portfolio of market, very conversations manage us of our our our Given

invaluable our of many like and times different is our economic sponsors of an these. through experience cycles team that asset in The

our asset analysis portfolio to of multifamily office collections. underlying of the during minor rating. our tenant process, Consistent in trends required collections our and our made quarterly All portfolio in in April the only robust review consistent to interest An underlying with that reevaluated loan showed our assign while showed risk every payments both in updated property we borrowers first quarter of decreases March an portfolio April.

The risk and risk we as at environment rating a end the to X.X property's which of a rating, limited from an underlying fourth driven the the retail the COVID-sensitive of did average given of have which billion XX% move of five-point the our view weighted quarter. more the provided Our totaled two migration types, quarter $X.X portfolio, the collectively, exposure. by to In portfolio the our hospitality, housing, incremental scale, of a end some at business on supplemental, We rating X.X we plans. four loans. has sale hospitality our and on very such for property was disclosure our increase

on non-mark-to-market and approximately Both loans previously cash stabilized flowing overall properties. loans represent were financed portfolio. are of the collectively The and facilities X%

our new partial sponsor to will closely deferral. debt loans, include equity sponsors hotel those working which are this them service help with and to and navigate expect both We modify environment

quarter, the repayments. we During received $XXX of million

a repayments, we refinance always in have loans. near is accurately It loans to lenders or at dialogue our Those stabilization. predict several with But our as difficult active more to this market. portfolio in sponsors in so reminder, are even

the taking capital. today remain conservative are deploying in We posture very our selective will and

well-positioned However, be advantage attractive should what some of an lending our should we'll more environment. stabilized to loans take believe repay, of be we

to we actions me With believe environment the that, took to have KREF call that the continue Finally, we let and over Patrick. position coming turn this will well. into

Patrick Mattson

everyone. you, Matt, morning, and Thank good

financing internal of amount with nearly to our ago, team IPO, sources, our KKR diversify and devoted our and capital capacity. considerable three a working financing resources, our markets time years Following we non-mark-to-market closely increase

in completely to non-mark recent quarter The secured non-mark-to-market financing liabilities to market, in-place XX% levels us growth end, was allowed risk financing volatility. of the XX% of XXXX. maintaining target to lower of As compared leverage our the our of has while despite

the closing quarter to with add first facility. in warehouse non-mark-to-market million of the capacity continued We $XXX new a

which matures million. In addition, we revolver, increased in to corporate our $XX December the million by XXXX size of $XXX

traditional are global marked crisis, secured Unlike facilities to repo repo facilities XX% our of Our financing. credit represents only. financing to our prior the financial outstanding

by with continues and industry. is XX office than As across Class Liquidity approximately a supplemental of are you balance predominantly Page by the a diversified lending are primary A secured individual across million. secured $XXX which assets. the exposure aggregate, be facilities materials, XX with of different can In facilities see our billion, to greater on multifamily $X.X XX% partners, no three loans the of principal focus

we our focused As Matt our we in is environment relative while cognizant and mentioned, managing strong, are market appropriately. the the are on liquidity feel position of

of end, on of consisted undrawn end, which of $XX for pledged capacity full At approved the we the approximately drawdown million. quarter reflects our $XXX the million cash balance of approximately and revolver, million of repaid on plus $XXX million revolver. collateral sheet, liquidity quarter corporate to $XXX Subsequent our

of and Our over million just the revolver approximately of from consisting today. current increased end, portion to has only $XX $XXX quarter $XXX undrawn at the million million liquidity cash

needs We funding continue on position obligations. manage our potential for our both future and liabilities capital to liquidity

create and deleveraging facilities. discussions, starting to are for On selectively the liquidity exchange liability engage holidays side, utilize on to our position proactive in partial in our we mark-to-market

future projections. delayed principal aggregate month On obligations to the future of be approximately environment. funding, our We our rate million proxy committed or quarter may liquidity require We model the balance are be funding to recent at out funding given expenditures, capital a property our which which $XXX near-term or run million some current end. funded were level XX% future needs asset good believe for of for hurdles approximately related of side, is our $XX a

March our on than of highlight, facilities obligations have more funding facilities fundings. future we To our across XX% lines. corresponding financing our Additionally, to to these many financing match utilized of access various we financing

have our proactive this liquidity used market. We to in be

a in an times XX Given share, X.XX early of representing the April million in markets, shares dividend $XX.XX book and we December equity value. significant repurchased volatility average price $XX of March yield the broader per our and at XX%

accretive repurchases approximately was of the per $X.XX first $X.XX, share in share value quarter. The increased were by and which recognized highly book

loans. invested in floating of Finally, LIBOR-based portfolio the XX.X% rate remains

financing portfolio zero, LIBOR our basis discussed LIBOR XX interest have floor to we've basis floors a only benefit benefit KREF rate As net a the of income rate rate declining a with liabilities XX% and of a of X% environment. in above previously the below has points, at decreased LIBOR us a which and loan continue allows at from to points cost spot provide least floor XX as currently

Before your results will I we for over on our call for turn to and today, it briefly questions to touch open CECL our Mostafa implementation. XQ the

Mostafa Nagaty

And Patrick. everyone. good Thanks, morning,

B-pieces, with a which our CMBS investment private equity $XX a million to basis. fund underlying IPO, prior portfolio maturity approximately reminder, unlevered made a we fund, hold and are As on called, held to of REPA an KKRS

results a REPA first-quarter of in decline fair unrealized investment. fund $X equity included the value our Our million

from the the the result a the impact pandemic. The REPA could value fair next As portfolio over the market to investments recent few of of underlying due quarters disruption based on market to developments. COVID-XX market the fluctuate

spend minute me Now value. our to book a let go over

was per $XX.XX of compared $XX.XX, book share value to as quarter-end Our QX.

in change share book of In addition stock mark-to-market CECL by book just discussed, value book our our our per REPA share we value reduced one, repurchase adjustments two quarter-over-quarter in per main the $X.XX; which $X.XX contributed first cumulative drivers X.X reserve our the our million which two, the the common to accretive for to our per quarter, share. value of and shares were:

per forward details found our go value can supplemental. X Additional share Page of our be regarding book on

with current Finally, thoughts conclude my I overview our remarks on an and of the CECL will reserve the our approach environment. CECL light of in

Our effective new us for standard January on became X. CECL

loan fit most disclosed market XX-Q, default evaluated were in not concerning on KREF probability-weighted focus of of utilize with expected that given from our historical the cash model, data a default, loans major flow economic our in license that represents loss using a As and markets. varying affordability Certain Form loss did conditions. approach loans model larger we subset closely combined

The a balance. in commitments XXX cumulative of portfolio In $XX.X we reduction points reserve of is $XX.X year-to-date first-quarter $X.X a which value, represents share. CECL as recorded or our outstanding day million or CECL resulting million book $X.XX share January to attributable provision cumulative to book CECL million of our incremental statement, in of principal impact, basis the million impact income per one share addition $XX million or the per per loan value $X.XX recorded unfunded aggregate to $XX.X an $X.XX X additional our

taking our during deploying macroeconomic the resulting in posture reserve was a CECL of by COVID-XX and conservative day capital. changes compared our In summary, the in primarily driven pandemic. very the quarter our today in increase selective projected the will The one are to adjustment we remain impact from outlook,

position. liquidity strong a have We

have portfolio We liabilities. matched lower non-mark-to-market conservatively with risk, built a

well. And questions. that we today. into this for and coming the we And now, happy Thank continue your believe took have joining position finally, we're KREF environment will again actions to you to take us

Operator

ahead. [Operator comes KBW. Instructions] from Rahmani The first Jade of Please question go

Jade Rahmani

everyone. from Thank hear to you very glad much, and

parameters the some XX% facility that, can to around or In of we outstands For the in to terms be next you credit by quarter over should somewhere perhaps range of of expect the reduced deleveraging, magnitude put XX% perhaps? example, so? borrowings

Patrick Mattson

Patrick. Hey, It's Jade, that good take morning. one. I'll

things, first, So I a to just of guess, couple here. level set

talking non-mark about to of are within markets. facilities, these that market. our we're Obviously, facilities And capital XX% there's the not no

be we would anything that would doing proactive. So be

been Just about haven't question, lines our to on to opposed be of margin a think something XX% we facilities to X% more your to XX%. But direct any we as the of would to think get called clear, to on date. of a deleveraging to XX% sort I

Operator

here accidentally himself. disconnected was Maybe Ok. I unmuting believe appears himself. It that he

Please question, ahead, Stephen do to sir. the So in go of who go I'll this next case, is Raymond what is James. Laws

Stephen Laws

buyback valuation relative about the attractive up. the become opportunistic opens capitalize book. Can building maybe new you buyback some activity powder it's more liquidity what the and to does your up dry on when and less back and talk liquidity and investments point to At into about market considerations

kind Just you return think how about the any color economic of forward. two you from as of here look options those

Matt Salem

can Matt that us you here. some we be take economic bought stock. be And trading you it it have in is, we I obviously, levels. making at And more cautious, It's I versus think stock gave do There offensive joining little capital that's the our an we shareholders is a take buy us balance of down and of the or it we in to of on loans and I thank end, to us, against and the price saw one, dividend you. makes inactive shares preserving to the lot those back sense total, when yield. a liquidity, that just the buy the XX% our to that to had and back would trying opportunistic Obviously, of how post accretive a action liquidity, new going environment those Thanks we're Stephen. market was of Yes. preserving but bit mean when path hope I for that let buying we you $X.XX stock. balance doesn't the was And we expect extraordinary us March, to and obviously, at see think around aren't a a overall we in few factor in quarter sheet. accretion about what

think and was the back you buy you to could to loans about that that thought right around And new versus so potentially use where uncertainty stock. that we do that the make it capital thing to

Stephen Laws

you decline on going is should the to That certainly of somewhat of the or is that been How obviously, about level balance. have back add think, accounting least But at a as year more value reserve Jade can or the Or back the Will was very at state something we you new to impact you path continue an from were math goes Will it as equity saw steady in we a is to those that CECL. adjusted X% funding to I may accretive in down leverage, back impact we there's we headed. look two think previously? mentioned, that up levels a This book an to deck. view and where where and is? leverage forward? XX%

Patrick Mattson

fully I first, of would leverage, portfolio point, say, So, standpoint, I guess, in deployed. a at this terms we're from

the that's So first thing.

number, like that the which take that. reduce steps we of CECL line you only we're but of to year-end. was at I us. talked times, a That anticipating of significant the sort includes reserve, mid- some as right out for we've facilities. threes, Obviously, we non-mark-to-market, off for see feels move you'll if that The saw, not is about of of our sort some marginally mid-threes, feels look-through that I'm proactively of in up thing, which presented of in leverage all on high basis, was to certain X.X think total higher. back sort more nonrecourse, the change near-term sort in from there, second financing when past, thing the our the in reported you range leverage which could a the

Stephen Laws

the Portland. Great. than Loan term with asset the updates of like XX with And on there maturity? looks year. lastly, retail a looking XX, a only Any remaining you've given had It's a Page less at borrower, max one in near-term loan discussions that

Patrick Mattson

this Right. year? On that maturing talking facility, later that's you're I about the facility guess,

Stephen Laws

it asset XX Looks in Portland, Oregon. Loan like about retail months. in six Well, to a matures

Matt Salem

Right.

So we're loan plan. of business with sort in active regarding that that that discussions and sponsor

crisis the one that obviously, maturity with that's, sponsor closely ones managing we're that this through of working and toward date. So the

Stephen Laws

Okay, gave. you. Thank you appreciate color Well, the great.

Operator

you. dropped KBW. before, I'm Jade sorry, The from go Rahmani. Please ahead, next Thank your questioner is line sir. have

Jade Rahmani

Yes, thanks very much.

can of sure multifamily right off. talk multifamily now But I'm about I how a Sorry, may think cut debate I portfolio? got the not perform. somewhat you there's about how healthy

You it mentioned A. is XX% of Class

assume the with those to perform? being expect tenants right can to you deal you shortfall the any better as in do apartments experienced equipped to loans? are multifamily inference economic your underlying And How being give I the that that's multifamily update now.

Matt Salem

it's guess, Matt. Jade, that. can take I Hey, I

You're in that. right

this the quarter reason additional that broke provide supplemental information. I in to that our think we out

real of tenant and collections different I estate, rental of a tenant and underlying could the there. quality obviously, you level have they type the depending what the see of jobs level think on, kind the of

and through. the the month versus far, but been so I were I how see on And when think remarks, think is, at come line I look performance they So our you May strong. this to everybody has in -- obviously, at But month. April collections look said over March, when we prepared look at those going in

able and on that going home income. and say, to obviously, while from is these would are this are earning predominantly, salaried employees, work And still, I are right,

saw So the very contraction filter thinking economy, I risks think in And in clearly, white-collar through portfolio. prolonged the we're jobs, always starts you U.S. that etc. the if deep to where about to a salaried, and

and our well That's that and to assets. multifamily we're potentially through understand impact trying of watching come pretty how what leased. could Most that is

about So average it's leased. on XX%

So is, right the more thing. property for the less which now collections the at lease-up and level, little underlying a us bit good obviously, a it's about about

how think we're that's I about So it. thinking

like market it. in I today. monitoring feel we're it But think we about good closely a obviously, this,

Jade Rahmani

And what of those actual owners buildings? has been of generally the tone the

Matt Salem

would I right think wouldn't or has and a positive. that right? of the and any is think would at been I property this on But anybody's points constructive. there's sure business there'll usual big and say, anybody and say pretty so positive June, say tone thinking what other got them look the far, But as to pretty point. inventory to I and now, understand around that taking But making don't I be been has tone again, we've we I at. May may going happen. the impact are company our And be data corners looking

Jade Rahmani

you have had on the that from either Class durable are co-working that that expect exposed XX% Do A? buildings been And there class? any perhaps also, mentioned direct some or You co-working? portfolio? competition lease-up to Can to be buildings touch is exposure in you also office that asset a more

Matt Salem

Yeah.

if assets than we -- for any office our Let the instance, has where exact co-working leased U.S., direct market exposure, York the take tenants. co-working office I'll one, in less biggest City, Francisco that look New three San like, here. now, Angeles their you is those X% like markets. up and Los have number top WeWork portfolio number me co-working don't of and Right And pull the by at

a and about in is we of up. co-working existing think about component I our don't relates as on today well the lease comment, average. to are my concerned leased to of in look particularly that And it's assets But obviously, co-working on the what's XX% going terms say but tenancy, portfolio we're also it every obviously, market. as ability at So just similar space office multifamily to

support level debt of the tenancy So of there could a service. and base cash there the is that there, a support base flow help, property level obviously,

we'll So we sit those continue where exposure. I feel But from follow that think overall closely. we good to today, about

Jade Rahmani

OK.

there dividend and high In is reasonable the terms of expectations you about are think trajectory, to could level baseline around. comments any some think you earnings make

call, how a which, decision things. leaves make Blackstone's a about on regarding didn't in think guys reduction, that. hear the potential you call, June, the are would I BXMT's for open said want dividend I the they say obviously, although board they thinking to

Matt Salem

dividend pay Sure. I'll It's on the our dividend. view the I a say would cash priority our changed. touch hasn't to on dividend.

information the additional of target weeks We two minimum taxable what of earnings floors, able income. think commented before, from look now at they'll LIBOR meets our ago. we've we got dividend I annual at lots that our paid incorporate a you point. and if but of from just like the to mid-June. liquidity out XX% moment, Obviously, And decision in today, power board to similar And a and be comes new company make you that on we'll whatever until

Operator

of The Shane Morgan. ahead. question go comes from Please Rick next JP

Rick Shane

Hey, Thanks my taking questions disclosure. I how just morning. your this to appreciate much want we And guys. for say

I draws very some think loans. guys I you made helpful. want about on to touch committed comments did on it's

were $XX through And If we million roughly year-end. you a month look repayments a expect $XX about might what compare at of to in month. that QX, talking million repayments. You're terms about

expect I year move as million very Last suspect terms $XXX probably that I'm So, of on we repayments? was would what front-loaded. was in through curious a you average. XXXX month

Patrick Mattson

take Patrick. Rick, good morning. I'll It's that one.

first, as on not you can science. imagine, the fundings, it's precise guess, a I So

them I are mentioned CapEx number and hurdled. in delays including what fundings we've that number that out factors bit A historically. are lead spending. third could on our But there the expect we to forecasting a in to comments, of little we're are of pay, About part what of a based of that's in paid trajectory, as hurdled. a So, a slowdown

cause So, of sort further that delays. can

against And then, we of as indicated, that number best payments we expect our those. to So, that will have we're would I of out. sort financing those also a map doing

that so largely And expected cover of fundings. a good will portion our

it the it's, of what now before, to On discussions look nature just there profile the refi said, side, was could active assess lenders more in difficult prepayment that are repayment leverage, number and of stabilization near difficult having assets, the are of are the like. both schedule That if with the of positions. a of that obviously, lower loans the some lenders. those rate to given dialogue And fixed-rate floating with they're sort even

predict. given prepayments So the year. loans, some as forecast it's difficult those to But half size we of of some of rather in of second be out meaningful the this those could

Rick Shane

little the for liquidity And And to that now. conversation dimensionalize for how Look, through order in But those about, to thank a obviously, of it shut not lot sense you sort taking a manage hey, down is do terms there's How we preserve sort move anyway. the commitments. do guys future to as those right an Presumably, of portfolio of the meet going relationships? fundings -- you're year. full -- be makes attempt to with you you intimated you bit? of we're in those have to activity, the borrowers idea that

Matt Salem

that. Yes, I it's can Matt. take

a is, I some extent, similar everybody place. to in think

and so of of we're obviously, and And frankly, not expectation conservative. open today. capital it's an actively And there's some that quite kind being lending

an And just appraiser out go property there. site some do you inspect you like get and logistics, how do it's of right, how the

community. side we starts side, largely, and the acquisition diminish. down And say, everything would equity so the going commerce on the and just also it's the in not until It's has get lending can to place shelter I slowed

So not everyone I It's is a think conversation. understand very, difficult they that.

and sure and as rooting that homes again leave here things can get transactional is a can we each other economy going that everybody recovers think of I our for making the perspective. kind from we

Rick Shane

it. Got

Okay. much, Thank guys. very you

Operator

The Delaney go comes of from Please ahead. Securities. JMP next Steve question

Steve Delaney

Good your asset one I comment CECL there's Can in an reserve morning, from of that individual as whether me. question on any specific meaningful ask wanted reserve figure? just everyone. you on And $XX to total million. to

Mostafa Nagaty

Steven. morning, for Thanks the Mostafa. question. Good This is

Steve Delaney

Hi, Mostafa. Yeah.

Mostafa Nagaty

How you? are

Steve Delaney

Good.

Mostafa Nagaty

the our loan loan our we as for same historical reserve So had. the given CECL basically, property project by loss loss model fourth that from most for a use each We data of this is clause it's a reserve whole low-level single loans, supported KERF to approach.

So there's than we're outside the running anything not really the just model. of other ordinary

So -- there increase is no -- and the

Steve Delaney

Okay.

jumped loan that of KREF one just Sort the particular would portfolio, greater loss required much reserve than have on nothing a as out indicated.

Mostafa Nagaty

increase primarily correct. by COVID. And forecast the is was the That driven macroeconomic given the

Steve Delaney

COVID, explain Well, I sure. Yeah. why asked. me let

you So million. $XX had

$X.X have You principal. million of outstanding

get I roughly So XXX.

you last had the might XX mentioned at we we had press and BXMT's I think Mostafa. call XXX, A.M., Well, night. releases have

calculate for outstanding I And XX points basis them on principles.

XX%, So your XX% have up. their to you combined far what And XX% not two in reserve at is mention times BXMT versus almost hotel put less retail their exposure. foreign

at not So or all trying to anything. trash them

that. And sure will all question. all -- over your outstanding was level But the but reason to my is... track of it obviously, interesting be I I I'm first quarter, think, refine analysts this on the principal be your call, that think figure of the how the CECL we'll I'm balances. of the time, for for And it is us. hype sure is new But This this part interesting to versus will out reserve

Mostafa Nagaty

Yeah.

Steve Delaney

Go ahead. I'm sorry.

Mostafa Nagaty

we very a the very the is conservative away back have good stayed good that's results. Yeah, And Steven. would any I make question, estimates. our that from we on adjustments to This subjective on observation say end just is here. been

the start macroeconomic tell. by just change it's And and the -- driven believe time conservative the basically model was we really very of kind a will forecast. we And as and just reserve, with you said,

Steve Delaney

this And being time. you uncertain for stay congrats for the at comments. well. Well, everyone, conservative you to Thank

Operator

Arren from ahead. comes question next The go Citi. Cyganovich of Please

Arren Cyganovich

Are Thanks. all? out. My to been has the phone But in expected apologize asked. at deleveraging? change advance repo stable through if the been rates have I the those this stay lenders asked to going has and

Patrick Mattson

Arren, good Patrick. morning, it's

to me guess, across that. say if the borrowing our look of first, kind generally, of kind that relates range. XX% facilities, address I to we're XX% lenders, landscape the in Let repo you would I as it of

area think that's I with to willing they would still consistent our discussions be a them, lend. from where

see broader on we I available level, that higher that leverage is to across leverage the think but of there ourselves that a not availed you'll have is sort market, at repo.

So sort I think that that's of intact. still largely

liquidity we're we've think to maybe proactive is be I that looking got position. here

seen, the of non-mark-to-market up years last lot effort the you've taken to bulk As financing. a over really we've few

in to that look that we're so if non-mark-to-market to facilities deleveraging partial And avail can this exchange to we some for amount by ourselves offering holidays, do of repo in our market. going in

We're is that. the there. available a at in think relates future to on and change And as out moment, that the existing so But of I'm leverage. expecting not it exploring assets, for material I sort that the line assets

Arren Cyganovich

you. Thank

Operator

like to Michael This any remarks. concludes our the question-and-answer to back conference Shapiro session. closing for I would turn over

Michael Shapiro

And everybody, there's follow-up We thank well any you, questions, time if feel appreciate the reach joining you and you. hope us that please today. for stay and Thank out. And to free healthy.

Operator

Thank concluded. for now today’s is you attending conference The presentation.

You disconnect. may now

KKR Real Estate Finance Trust (KREF) 1 May 202020 Q1 Earnings call transcript