KREF - Earnings call transcript Q4 2021 | KKR Real Estate Finance Trust Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

00:06 Good morning, and welcome to the KKR Real Estate Finance Trust, Inc. Fourth Quarter 2021 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. like the now Jack over would Switala. I to conference turn to XX:XX go Please ahead.

Jack Switala

you, to quarter operator. Estate Thank and you Great. XX:XX Welcome are families earnings hope all safe for and We your Finance the call the XXXX. fourth of healthy. that of Trust Real KKR

would on Patrick Jack Nagaty. As our earnings our Salem; which release CEO, and is Today, to website. these related of Relations most figures Mattson; certain a our GAAP joined to the provide call available Mostafa the Switala. like COO, CFO, recently future over and also not operator contain refer XX-K the in presentation, Investor This I that reconciled are financial the factors Before our refer brief this statements, on will or everyone for I'm XX:XX Matt both Matt, our of certain President XX:XX our to to will to call, which mentioned, measures do I we the I by remind events our recap and call to the on will turn statements. in filed non-GAAP supplementary forward-looking XX:XX results. guarantee which portion call please of performance, are cautionary

share. CECL quarter Based to value dividend due losses $XX.XX largely in now XX. as $X.XX this share were closing of share negative increase $X.XX we the write-offs September of the of quarter quarter share GAAP to For with share to net which or in $X.XX reflects December of grown share as quarter. the dividend by quarter. book like This earnings XX, Distributable the an $X.XX per on income yesterday's value per we per of I'd value per cumulative on mid-January, the increased had Book fourth fourth With to equity XXXX, we $XX.XX, yield of This in or per $X.X along per the compared book share. loan XXXX, of includes turn to as Finally, cash a with over share XXXX. this XX:XX impact $XX.X per price, million have $X.XX negative consecutive in in realized XX:XX call that, annualized benefit paid CECL of October Matt. common which per X.X%. accretive XX:XX respect reversal driven is was offering to an seventh million

Matt Salem

increased quarter, KREF XX% morning, Thank you, $X.X originations our grew our $X record and XXXX, to approximately by of thank X this XX to a start loans everyone we as for billion record major $X.X delivered the billion you highlight X:XX closing Jack. year call Great. Good on cap-off drivers billion. today. for the from joining contributing of year-end. to portfolio year I'll XX:XX In billion $X.X activity. to

XX:XX In capitalize were CRE of lending estate senior XX deep relationships. suite XXXX, B now one KKR credit science XX perspective, forward. inception borrowers. real of our now We we billion, an senior credit team we $XX XX:XX quarter D&A and size Class-A. the to originators increase Still, in from Two, growth, our have the First, respectively, the and grown clients' These borrower billion and in which on XXXX, portfolio pre-COVID the and multifamily, XX for in product XX% our record representing XX% fourth shares segment, and than repayments alignment professionals, fourth and quarter within were X repayments XX remains fixed quarter, to the back X% grown, have more X as $XXX benefited multifamily loans, repeat first with team, going a Second, billion XX:XX made investment XXXX. of of with paydowns. our rate rate partial to our property-level KKR today. X million suite through fixed raising equity products in access our owns XX% of broader X be we XX floors. increased double-digit increasing has representing half Fourth from loans originated we -- loans of predict, life of capital the drive to received floating such a In representing we've to in team target unique This which of drive the since market underwritten XX% originations. credit the across terms the broker office, repayments messaged are team. repayment third and further a million, originations shareholder issuing a Term our and is well-positioned loan core while our line loan in market would the host in to And originations in base, including the existing XX% have raising can been priority has with which estate has solutions accretive rate, is which broader led changing real-time higher deeper us we and low We broader to common our $XX relationships. we billion our expect Estate earnings we're XX:XX same. the with it a KREF -- an permanent Real KKR, These total of this average modest financing, Since quarter diversify real connectivity weighting and real senior value-add. fourth to fourth KKR across the offer fully our first floating hospitality is at XX% to attractive we embedded from of helped have of towards and fourth of weighted year loans from pace market rate, last from benefited over helped valuable being XX:XX beginning factors per Third, equity. XX Loan and largest economic views strategically across LIBOR which, organization, both from IRR, of commercial we've base rate quarter each, equity difficult returns leveraged and and that loans. originations. private very and $X upsizing non-mark in for our to around for of similar in to is facilities, global in originated office data COVID, XX:XX is bespoke always higher following the attractive finally, XX:XX waterfall originations higher macro environment, we've particularly KKR XX% now our would interest greatly and expect quarter our normal preferred life to at CLO $X.X much allocation half a shares the the $X year and the pre-COVID. and in platform estate with

However, these through repayments growth. portfolio and transitioning floors are

Our new the constructive quarters set In short-term loan are to few we increases interest floors income positively CRE rate have originations on senior to the rates. close correlated in the environment, XX:XX expect backdrop. to become midst of zero. market secured we the in coming Additionally,

COVID. momentum. quarter-end. loans, weighted and as of want in life portfolio, some now since activity in by be segments which January been been X% of record $XXX opportunities. what pipeline, much March wish joining we us either call represent our significant be to the is our of We and robust XXX% such XX:XX list, an At Multifamily in to but has in our well loans The and has CFO, remain team of close moment early placed XXX% Nagaty seen and has quarter integral exclusivity floating to we in I of LTV With and only those respectively. part since turn pandemic, Patrick. been each want growth loans to the of already take saying contributions personnel active future the today subsequent leaving science risk with front, watch beginning him average four have closed endeavors. XX:XX million Lastly, it X% our X has a comprise nearly his expect industrial, start the I'll year, and is the or under the pursue We made rated XXXX. performing, other that, of to to XX%. on Mostafa thank a Mostafa will XX:XX in our has who than over have portfolio of a X rate positive that and loans of I stronger portfolio to our

Patrick Mattson

our morning last portfolio billion I'll everyone. support good on over as touch grown base, months first of Matt, the the which funded Thank $X.X our course to has capital XX:XX year-end. XX of you, and

transaction in to financings a XXX our and plus and expect quarter, before of fourth last repricing new million our with XX:XX weighted a to will of SOFR, side, forward issuance by And capital week and priced in average issuance of all Related, our back rate fees million on XX:XX our running CLO X market result match our of and points. the XXX% non-mark points just supported new cost to we This price we above capital SOFR The the originations months. third of multifamily going CLO reducing expenses. based. second liabilities will XX.XX%. basis billion percentage CLO B execute $XXX On be to market XX%. increasing liabilities, Term our amortized the properties basis investment-grade This $XXX within term our non-recourse associated liability inaugural by and of is term, $X last advance approximately to CRE, XXX relative Loan add-on cost we non-mark loan a

Sound $X.X permanent The of the our goal loans, October our helped today. from on financings X.X our $XXX in net point positive proceeds on or X capital follow at gross issuance as the experiencing we until through the QX we managing partners rating of bank. current which of with life beginning This recently, of also In of $XX.X office on a with three January, remain. support call. repaid which Fusion in And accretive of book SOFR portfolio refinance Group the momentum $X.X outstanding While watch XXXX, At respect for GAAP billion improvement approximately December, -- cost Series-A other over QX to $X.XX the last $XXX.X XX% estate. square of the with more title a From took we million Lloyd which LIBOR future our improvement X.X%. actively local joint discussed XX% our full-service This the XX% accounting may value the re-imagining, full Brooklyn-based We've year-end In loans transition developing balance. and existing in in common pandemic, list are of a is I we mitigating X Turning billion loan, through equity $XXX capital on to raised shares a our perspective, real in last at January was are LIBOR today basis million approximately want funded slight capital XX:XX quarter venture to loans and on grew a preferred on institutional the $XXX and of we areas a as quarter. planning region. relationship were now a URG URG, XXXX, risk-rated our with from only an by scale, million side Portland with helped the and fixed January, Class of with was base presence phase grow basis in million our or portfolio seven portfolio a this revitalization on than QX with money placed Class-A financing of the CECL basis. has adequately originated remain On the existing estate X.X structure. own we equity is of capitalized retail to June are beginning we property for XXXX which by and had property an XX:XX better, permanent a real are to with loan reserve as XX:XX A a XX:XX foot billion million business, through URG principal Renaissance of managing commercial where Portland specializes center we a XXXX. borrowing risk. which year-end, a of on share per XX:XX process along is to we hospitality $X.X the Urban notably, from on property, risk have of longstanding to watch for list. across Most and of a X.X Center. in touch raise a issuance of approximately equity our million facilities company reserved a in a the

As We with gain in or we GAAP earnings a this contributing per QX a the to also million negative distributable $X.X result, reversal to share respect this realized $XX.X on recognized share loss in from CECL an DD. $X.XX loan QX loan. XX:XX $X.XX per through

corporate capacity positive sold, are $XXX liquidity contract. strong approximately units included list which revolver of on position of and are with New with an million a We $XXX under undrawn to seeing now KREF million. XX:XX over million had of be loan of million our finished our which to initial through us. the trends watch total underlying condo remain available X loans, sales. unit luxury example, cash This in for to $XXX loan $XXX Lastly, quarter been paid down remaining Only X $XX York million has balance

increased million $XXX by over the be XXXX, $X.X In We quarter of grew year $XXX a funded in a loans to $X can to year-end. with additional record last million $XXX as provide with levered closed of and originations in that unpledged record under since the We of QX at quarter also summary, originations billion solid to or and $X.X liquidity. to million record compares billion start accretive unencumbered And value capped base a year by portfolio quarter-end and a which had common the XX:XX start billion, exclusivity off value credit happy you we're QX all XXXX billion, October book book questions. share to while take of seventh permanent to million in stock high was per in preferred approximately $XXX and our growth. XX:XX raising XX:XX finally, $X.XX joining in of $XXX the in us our million standards. maintaining per Thank We equity last your consecutive gross and proceeds share $X.X now for quarter today month. approximately quality equity expanded

Operator

you. XX:XX Thank

begin [Operator And KBW. from now Instructions] question first will will come Please We the the ahead. with question-and-answer Jade Rahmani session. go

Jade Rahmani

one much. also could very trajectory, you prior any consistent give you commentary ex-items of yields are in that where peers you talk distributable Can dividend, timing if levered was around period? noting outlook did to $X.XX, in still quarter Thank your now what NII ROEs are earnings toward business of XX:XX of based if KREF originations excess on versus in. talk EPS you this rough the they the but see And about repayments, for coming sequential

and talk if So something trajectory. just you could to level -- around ROEs maybe levered earnings

Matt Salem

lot for it's for XX:XX Sure, a the today, thanks Jade. the question call joining Thanks and Matt.

Let's first part. take that

around new that point of of somewhere is we're return mind of I ROE so line floor a pre-COVID with think XX% this X. we most constituents asset lot about as loan the healthy what of on with keep largely to is pretty range, and that every spread at a so saw returns generally basis, are in and the let's an in that think level making -- has at time SOFR XX% in

you from ROEs increases those benefit future -- will in rates. benefit And will so

is projections a the at where see the with not the market we I think happen. that market come So we as back pre-COVID of stable expect couple is translates floors on we're the the it that was going then liability right give last time, think the into stock this that's over And course to a that's see our down floor been X now. both and to we at quarters. that but in market in I LIBOR The kind earnings, asset XX:XX going that or consistent think side I line SOFR we've portfolio what point the and of that few on and And messaged still to basis. LIBOR to One, roll-off things. reset of as and earnings relatively

So side that’s equation. negative the of maybe the

positively side from going you convex I next the to in of so think over that as or portfolio course the is the of can become two, remarks, that increases of get of the we positive quarter growth the side in some on interest equation short-term things. the messaged to rates prepared

Jade Rahmani

Thank XX:XX you.

Just it core credit there post-March increased the any consistent? preceding of would describe exposure on side, and versus life the Are multifamily sciences, to I changes? industrial the quality focus. how XXXX Is remains you've originations know post-COVID, you characteristics period. the

you provide more be anything that Beyond specifically could credit just on might how compared?

Matt Salem

XX:XX From a pre-COVID Jade? basis,

Jade Rahmani

The probably looking materially Yeah. types loans broader of at a now production the before. XX:XX than you're the the you're clearly doing platform has lot is has are grown, level deals increased,

So, how characteristics? credit would you characterize

Matt Salem

me the Okay. equity -- let in XX:XX the on it I on say approach of would side. a side ways, touch couple let me different Yeah, credit and

backdrop I more of preceding equity rent favorite the quarter very property is seeing all, favorable favorable the and side, market XX:XX seeing lot strong capital is X the real on the very perspective. on there First for from types, than COVID a the say allocators. speaking, estate fundamental would lending a clearly, you're think now, largely from I demand of fundamental you're increases certainly and

our I think seeking of on driving of is volume assets real lot inflation hedges increase in in tailwinds filling and is transaction And volumes. that as of transaction people that pipelines. all terms there a yield that's

And balanced the on of really quarter, if to think activity then feeling some volumes covenants, big our coming cash LTVs you going side fund business because the our equity not we right look side if through, have at other as the consistent peer's And et a the I the credit it's transaction that you on credit. XX:XX market capital, the the And with flow side, cetera activity not search the all weight partially for I and quarter, feeling you shift in reasonable of of the at equation, help these very a now function we're weight we're think trade sweeps, we in the yield about that on volume. are so the activity previous all of if it's you are of of currently. that fourth quarters, think look fourth demand,

look of at to is transactions how there's and So I'd approaching lots today. it's market, the in lending say, balanced very

Jade Rahmani

for questions. taking Thanks the XX:XX

Matt Salem

XX:XX Thank you.

Operator

Please Hayes is Tim next go BTIG. question The with XX:XX from ahead.

Tim Hayes

afternoon, a good Congrats on Hey, guys. nice quarter. XX:XX

or bit there even the of you if here, but just point to just I any one next made that you've I of is it, -- asset us an have of much from, what guess triangulate like estimate mentioned and modest a at XX to you're the repayment little if question in quarters, rate turnover it's you on position know kind curious a think point like basis short-term sensitivity. portfolio I'm you modeling but benefit over call I before around when internal see do the to about a more of can you'll with a pipeline it, think couple the way any a a of hike benefit be position and lot share First needs comments about hike. just Matt, how based activity rates? to from in more you in you

Matt Salem

Tim, you joining for the thank XX:XX thanks the question. call, and for

have that's a because math, equation, run do right it's repayments. we think the sensitivity multi-variable you're for now a than guess just and I of -- timing we to we but course, the for trying and feel really better the could

Tim Hayes

Yeah. XX:XX

Matt Salem

we we exercise I bit said, long ultimately has little more in and already – growth, gone around COVID will just is think lot quarter interest little a the I come a guessing the the some that really first that sensitivity, next we repositioning kind be. come convexed That portfolio put more, I rates, and quickly that what you in modeling positively that but second the impact of or do earning obviously, being of [indiscernible] have that to of uncertainty need can you the portfolio to at lot very so those since delicate confidence a we a look turn bit of give can like see in a it's repayments creates a that's in could look at two the that expect the probably little be wish quarter. Originations down way, charts a we game. and it's bit a the supplement XX:XX

Tim Hayes

when like early former That's or quarter it's if but XQ, Yeah. good. said of XQ helpful, guess of you early next the kind you I end of I it I -- which like XX:XX sure there, wasn't XQ, meant sounds or QX, just is two, end

of have So thanks guys summer deeper mean you there. lending platform a And the and clarifying recently platform, I equity and at in bought KKR side. the for resi-transitional gotten a the question probably rental asked I before your a you've on XX:XX some then live peers, done asked broader I over single-family the you

parent traditional bring there. and asset expand I'm deeper haven't your in you of curious classes KKR, lending scope if you're the that of and that KREF of more just So what you, company focus portfolio, moves these been for type if makes for kind could benefits some get and to opportunities a there's

Matt Salem

XX:XX think every a Yeah, day. and I about question, think that's something Tim, great we

of into markets. property for back banks, better connectivity and and think way we the with across is translates and mostly And and it has different easiest a are substantially for what has the vehicles business much as of looks our So, think multiple plus transacting the for is operating side market, lots in the and core foremost connectivity. that’s partners overall now into brokers think, you market translates, it just equity and now. I -- XX:XX opportunistic types relevant well, for mentioned to investing grown has I that counterparty about in is more that first

are that now, active of allows millions of and in us segments really data and diligence we're we So the much and book, time historically active have we've for some the but our so would real right, own would start some on for in just the the us in spreads, are us gives relationships that's that a we estate our transact I'll size obviously And estate of deeper opportunities portfolio, that we've just a into to we translated us simple that a information lean two as like as just huge in been industrial but have. but in equity platform, there square into to Europe. as the platform be side it of market because Lastly, perhaps overall of and insight XX:XX in weren't some so to we lending we us, are one, market that more additional more across a that data things a these position space, history that that like even where we confidence think industrial be, feet equity gives business. of of XX:XX certainly invest lending the don't global a well. we gives Number would be real much examples that that have competitors team market perhaps where or well, some debt say actively sizable geographically I we SFR, have couple building global in

model, So I business it's model business to would debt equity. collaborative across and be a us model, business expect again and active same integrated an it's

year. in I of the Europe us to be course So expect over the active

Tim Hayes

like kind XX:XX terms already of And being that you or out how there are built team of is building where are that And it initiative at existing or that up Europe? is infrastructure/teams the can in of you just based acquiring kind just in remind me organically? with you're

Matt Salem

over working the his in LaSalle. that his today for building out here Ali is lead effort XX:XX us, No, team. of process came us with hired He's and someone name he London -- So, we're we've from basically in to Imran, we

place, And so the when we team start then we'll in get lending.

Tim Hayes

Got it, got XX:XX it.

this Okay. Well questions thanks for taking morning. my

Matt Salem

you, Thank Tim. XX:XX

Operator

Please will Raymond Stephen next with The question Laws XX:XX James. ahead. go from be

Stephen Laws

looks to to XX:XX or you morning. geographical, taking your winning Can touch origination Kind exposure it sequentially. it Is you borrowers strength talk about it talk relationships roughly like there? is the guys Hi, there? Florida the existing of to wanted new please. I on that you just in market doubled good Florida about pipeline

Matt Salem

question. the Steve, for XX:XX thank you Sure,

this that good a KREF. easily is how fundamental I for capital I with is think pockets a of that have example market lots as obviously other of some identifiable a of tailwinds. think of market Florida synergistic the And growth we positive is

increased the example, our folks of of and core, a our and outside on we've way by more didn't because We through have core borrow plus in affiliate really specifically Global the segment Atlantic KREF, a lot a of insurance side lot So given business multifamily us that lending our borrower some that of space. on has lot historically relationships of didn't right those -- do capital. they lot type of core touch have is activity we XX:XX of plus these increased driven increased they're points that the a needs of for usually of some our so cost really And are have while activity, a KREF we across borrowing borrowers, sponsors predominantly client have loan. And the some that's base.

year think the clients investment. as up multifamily of is active some And acquiring we very and did newer set them were we those they were properties. equity some for KREF with multifamily in just the that the in to market of we this ourselves within Florida segment of on think see in able and a lending and demographic were what growth the you so I and about Florida front transact the you clearly growth well Florida, And very

So originations a market really then it was driven multifamily new client and theme. had that by that we supportive by the that's base, obviously

Stephen Laws

driving what's then you of in more it about that? And mix? talk what's touch the there? commitments. past over Are a year, Thanks. can shift deferred Kind increase driving little of the increased the Great. some bit Is unfunded on XX:XX to design, things probably with doing you by but involved? That's kind financing

Matt Salem

in anything think I Yeah, that lending larger lending. when market more of jump of piece little industrial the the being can opportunity of plans XX:XX in a to done post-COVID a start we're have been construction the construction that bit seeing, of by I which that we've future lending, it some is about comprises you feel some most done It we most with we obvious and think free if the a market. XX:XX funding, on, has of out, the Patrick, basis I So at on business then miss. we're segment what design, look

think about perspective, when drag, gets think typically number. things very clearly, really that we the ground funding the of quickly, short relatively an and what's industrial So loan. a think get cash you And then number allocated capital but about, the the we and there into capital into that's future construction period I from is how is so liquidity quickly constraints, driving

we'll around but will quarter-to-quarter, where think we're band over we quarters. of in next what from it's I it be forward, in the would bounce of the few going expect range the of course,

Stephen Laws

XX:XX comments. the Great. Appreciate

Matt Salem

XX:XX Thank you.

Operator

question XX:XX from will be with next And Wells go Fandetti Fargo. ahead. Please Don the

Don Fandetti

XX:XX I you same to of, sort could there your of pre-COVID? is are buyers handle like much that or saw things And say, debt that nature? investors think wondering today Yes, credit to was you hiccups seeing do you widening if how Matt. on you and about talk that the CLOs, market

Patrick Mattson

XX:XX it's Hey, morning, Don. one. take Good Patrick, I'll that

was CLO the has issuance. huge obviously, think year year couple of The over as think I about really the grown last a market in today, segment we last significantly years.

time. of seen that, this widening we've base As part that throughout of investor a

deals of sort that buying. largely that you done, see think same if today see are I we fast and base the we think getting investor forward I to

I but investor term? of be that been buyers those difference a year, the just taken short-term the or buying have or that we're that size big gross the in given I is the seeing in phenomenon this as the volumes those will type the to demand, previously large base, to And longer think that of space last the think has of aren't that are some bit that not little CLO a to and think market, we reduced. get is Obviously, I year the over in a pullback people grow people but first be, persist the had have of to market, bigger we were demand question witnessing buyers the the that will much. some allocation that of we're part exiting

Don Fandetti

XX:XX Pat. Okay, thanks,

Matt Salem

within options so and think also got to facilities. advantage that, One we developing leader more Patrick I would non-mark really other that this capital a that I our KREF, to seen add bespoke through XX:XX markets and really market opportunistically, thing being of through is us team you've we've take many market

the terms our leader component of we're of course, that in liabilities. Of

us, have not I other go equity the for or as not lot market for to think on but set. to, thing competitive clearly a that is attractive whether we it of a for indication return it's necessarily outlets because an watch So material we

Don Fandetti

XX:XX Thank you.

Operator

next Shane The Rick go question from with will Please XX:XX ahead. JPMorgan. be

Rick Shane

$XXX that's happened, going from reserves the of going would of all the my important story before about thinking roughly interesting, you have guys. been a be an to Hey this reserves. years the have almost XX:XX CECL incremental and taking today you two news that, it's drive XX:XX years now we're that information growth, kind X reserves. points Look, to for a good about to hopefully Thanks terms good example, we're is many we of going everything add sort With How years? have questions basis some morning. of where of over past growth, and loan good loans, when and we you're going back part perspective. over CECL And of the were lot normalization talking gathered expect to for COVID some we're it's reserve, the few to next should years in ago because to going two we actuarial of have million

Mostafa Nagaty

this XX:XX is I'll Rick, one. take Hi Mostafa. this

our highly factors respect speaking CECL the quarters. index CRE that macroeconomic to environment. as the dependent model reserve, of the one we peers key price And the kind next the well few projections over there is of obviously, with is So, the as broadly use, on

CECL type the effect would be. what property has the also reserve on an -- So

the ended we about QX of outstanding XX QX. of Lloyd CECL balance with our $XX this hard about and result or on So I CECL That points, of our quarter-over-quarter the was XX:XX pinpoint looking think that CECL a for basis CECL I points loan in on it's QX reserve for terms reserve result of to kind mean so principal we in seen a historically, loans, new reversal with change points you from wrote-off significant -- we XXX that a have if ended reserve, originations. reduction said, in at million of basis

answer list other our XX:XX environment, see the you most loans. expect any question, watch reserve of in to changes be attributed factors historically which reserve, guess attributed to besides of is our our -- So macro can list So been your watch the had significant loans. of we one would I key so CECL any that than to changes

be points the macroeconomic -- range on put in CECL want to a numbers, better XX [indiscernible] basis -- on stable but loans call expect We depending reserve the we environment. of the it, the I would to environment, performing expect XX don't maybe, macroeconomic

Rick Shane

Got XX:XX it.

Patrick Mattson

the I a reserve think XX:XX And obviously somewhere -- about to more general thinking the probably expectation and am the reserve. reserve middle we does, range our I'm I understand so and of XX basis perspective. this pretty and from curious XX is is And it the in between the difference general a points wide that. specific

one idiosyncratic, to If are general I an fine the extent process reserve reserve you're of thinking sorts generically these you we this thought has from were nuances, understand to actuarial all -- and measure. back portfolio one what day your a to loans February And day the on general go was different on changes and is mix it to in but your think XXXX. what changed generic if and

Mostafa Nagaty

Yeah. XX:XX

if and our that initial If reserve quarter CECL you look or pre-COVID the we XXX X/X/XXXX, first you general points. the had at, basis think was reserve the about

of as our have environment. the the Post-COVID was it their not CECL the increased on macro significantly or all some peers a obviously result at a pre-COVID. So impact of COVID significant reserve of -- result of as

a is that again right more QX a hard, range XXXX. given our pinpoint reserve we're hard. backdrop. day it's And macroeconomic you the phase sensitive hard just reaching it And I stable macroeconomic was number, the So CECL or than it's where reserve lower now highly pre-COVID, to tell a very environments. can is CECL it's but just our to one

to alluded continues to as it long as we earlier. this expect So, be I at that phase that

Rick Shane

Okay, very you much. XX:XX thank

Operator

go XX:XX from Delaney [Operator is ahead. with question Securities. Steve Instructions] next JMP The Please

Steve Delaney

XX:XX Good Thank morning everyone. you.

the move financing you've advance have So reinvestment X FLX initial of I up now of that Patrick's net be about about XX% right, And I leverage. XX% it with you to an times CLO a $XXX the but about to $X question and and FLX two ask rate. million fourth -- in looks got fundings now on looks billion really of leverage, of X.X, we think, the like total about wanted with to quarter. in see funding. and presented you saw quarter, us strength In years

are just thinking non-recourse you the leverage is of to times, it because but something it my may that times this, So with of about of average on if roll update benefit X question looks that KREF this you looks like the and whether we for equity, about we when accustomed thinking a the forward, debt wrong? of to industry turns the mortgage we on higher would the commercial times, and X.XX the like REIT year, with sort shows advance [indiscernible] X times, model we CLOs. X -- to Could out rates X.X comment leverage come north models me it of

Patrick Mattson

Steve, Sure, good it's morning, Patrick. XX:XX

take that. I'll Good So morning.

not One, adding, there. places. we're the comments that obviously, of couple when we we're recall loans other we do it's a CLO, debt from new So taking

those that of So facilities when off other those we're we're facilities, off of pulling on. repo taking warehouse put we

advance look other portfolio. leverage Obviously, CLO close taking we're that more do assets -- to just taking we out, our pretty can there is back by and high, the the dial you assets offset on XX%. at highlight in unencumbered of to we a that profile bit the the net. leverage little that the number, this the got that that, as pointing rate given assets if we're The it's we've our getting, you're So is leverage, in

assets So we've some result unencumbered a as effectively that of got other are that.

Steve Delaney

see. I XX:XX

Patrick Mattson

CLOs. factor going The other preferred that, to first did fourth equity, mid-to-high offset of for that's financing, first you just that but quarter, think consider going including the to we're we X.X clear, about as that's And about target fairway threes. raise being that to thinking really our quarter in obviously us of just represents XX:XX as from the that's so kind stock leverage inclusive quarter, of the in all be to

we excluding leverage when So number the that CLOs, we're show it. we're total not including

Steve Delaney

overall on not basis, while No, to aggregate net understood, say I that -- I'm higher knew you're I was use leverage the from get is, the additional knew the yeah, CLOs you refinancing. XX:XX inclusive. and going that multifamily loans an going hearing guess cash you you're the CLO what the of I benefit to on

course, more pay just unencumbered debt to to of -- have just other just So assets. down but

up of So of if end than your I that for think kind rate we adjust would X.X. higher helpful with your because that's we something didn't run

I So Thank appreciate that. you.

Patrick Mattson

XX:XX Sure.

You're welcome.

Steve Delaney

just we've Thanks. I for Mostafa the future, XX:XX That's with working all say me. And in all would best enjoyed you. the

Mostafa Nagaty

lot. appreciate Thanks I XX:XX a it.

Operator

XX:XX Ladies session. any question-and-answer Jack to back over for closing I turn like Switala remarks. and conference gentlemen, this the to our would concludes

Jack Switala

here with today's everyone Thanks, any Great. to reach free call. XX:XX the joining Feel care. to team or me follow-up out for questions. Take

Operator

today's you attending XX:XX concluded. for The Thank presentation. conference has now

You disconnect. may now

KKR Real Estate Finance Trust (KREF) 10 Feb 222021 Q4 Earnings call transcript