KKR Real Estate Finance Trust (KREF) 25 Apr 232023 Q1 Earnings call transcript

Good morning, and welcome to the KKR Real Estate Finance Trust Inc.

First Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jack Switala. Please go ahead.

Great. to the Real first welcome earnings Finance and for call quarter operator, the Estate KKR Trust Thanks, of XXXX.

mentioned, call Matt operator joined our CFO, COO, the this Switala. and Jack As Decious. Today, Patrick on Mattson; the our by Salem; CEO, Kendra our President and is I'm

both that the to our which Investor portion also cautionary for or reconciled most which to to guarantee the Relations of figures This will our of call in certain XX-Q events supplementary contain do factors call, non-GAAP our will related would like future we the performance. website. to filed are statements, I Please financial to release refer certain which in and these earnings presentation, remind forward-looking recently everyone on available refer measures on are GAAP not statements.

I a provide Matt, the brief call recap Before over to results. our I'll turn of

reported million were share, net CECL per the or XXXX, GAAP million or quarter Distributable income first diluted diluted share. per $X.XX per million a $X.XX $X.XX share. $XX.X we earnings of including of negative $XX.X this of quarter $XX.X provision For a or

X.X% XX, Book a of $XX.XX, of quarter-over-quarter. value March XXXX decline per as share was

market from allowance processes for reserves primarily the properties $X.XX Our per uncertainty sponsors office well increase sales reduced commenced volatility, rated heightened sector. the and in have two the share $X.XX increased office The CECL X-risk due last quarter. to for liquidity, per additional share was to loans, particularly as where as

the yield Based on with cash dividend Finally, price, in quarter. to $X.XX respect we the dividend per of closing annualized first of an reflects share a paid XX.X%. March, yesterday's common

to now call turn would over to I Matt. the that, like With

and joining thank morning, us Good today. for Jack. Thanks, you

interest as of XXX% high strong $X.XX generated benefit per environment. dividend rate our to share this $X.XX from floating portfolio per the share rate to quarter relative continues our earnings KREF distributable

structure our been focus and has created we Maintaining defensive say very our you best-in-class the As KREF's liquidity. years, and on liquidity. non-mark-to-market today market have last focus for hyper-focused remains of dynamics. few financing liability posture have heard us current levels This given high primary

recession year, summer Rising money estate valuations. largest our real interest were center and last since regional the of we Beginning large inactive. banks risks weigh failures. earnings rates on the bank in transaction last seen And have continue to and call, two volumes largely

credit more tightening declining real oversight. take not financing banks exposure direct does on expect credit to narrative KREF of do While we institutions and or tightening regional has The have created conservative expectation conditions conditions financial weighed their around increase regional a any this valuations. to regulators a heavily already banks, posture as cause and estate nonbank

is our own portfolio, our loans secured management on our In properties. asset office by focus

our risk loans put with liquidity reserves We on have and office rating more continues this and increased The list significantly. X. two down with a be office challenged limited values sector of quarter watch to

Given identified levels KREF's through a approach of our working liquidity, our resolutions on proactive sponsors. have taken loans we in with high

optimize to we we valuations, has liquidity the kick we transact. not to full reasonable be are direct, we will the are Where down looking approach and KKR can of But outcomes. Our leveraging and road. been to find resources clear, the

not However, forced we're sellers.

call. list will in will there manage take at discuss in the little Patrick lower where a later property is basis. to we detail updates So liquidity, title and watch the our

$XXX funded million million. the loans or modestly to In As we portfolio repayments of net previously turn closed we $XXX previous throughout last increase $XX first expect and quarter, signaled received in for million quarter, loan quarters XXXX. the we over of

the of focus with on property portfolio segments Our resilient defensively is built market.

our this quarter robust portfolio and liquidity properties. new to maintain industrial multifamily end We loan of we XX% had at no quarter Nearly position. comprised originations our look of was as

Our the our the manager, a and operating us sophisticated view partnership environment. allow estate of to current maintain of with real our strength platform KKR

of team estate professionals. dedicated real a have approximately credit XX We investment

our Beyond fund. debt service diversified the KREF, SMAs we us This stay strong base capital a are actively allows in to lending relationships. as as bank active and for private market our insurance and client well

equipped As KREF playbook of to a we was our a we lending mortgage begin one first are similar defensive during stabilizes. of result market the when posturing, the REITs feel and COVID, utilize well to

company of is believe this long-term shares our demonstrates sector hold meaningful outstanding REIT between manager's KREF today. by shares the or Also manager of the in is highest KKR worth XX% million position XX mortgage percentage the noting and alignment held in We KREF. approximately ownership and

were we level XX, $X KREF $XXX a cash March corporate of revolver, was billion earlier, which including quarter million $XXX as liquidity mentioned I nearly of at end. our with undrawn of high As and operating with million

KKR of As billion $X in support we the have quarters, the discussed non-mark-to-market added Capital past team. prior the Markets additional over of two over years with we capacity

from of our credit. quarter the the diversified XX% marked of only XXXX, market billion X/X capital truly facilities completely bespoke financing and of as first on across providers with is a insurance in and Approximately and secured $X.X was added sources. XXXX XX remaining companies was which was away public non-mark-to-market banks basis to and of at of done such number the financing a foreign end

With turn Patrick. to I'll call that, the over

morning, everyone. Good Matt. you, Thank

capital focus But loans. the liquidity I'll list let watch around reserve front. efforts CECL an our and and on on me update today our first, provide

than total reserve the office two increase we or loans. total basis half principal million X-rated CECL in loan our quarter, a $XX reserve recorded a for points our against Slightly of CECL held our This reserve XXX of remains $XXX million balance. more

quarter loans of watch end. on X have total list a as the We of

previously, Philadelphia we office removed watch anticipated. detailed subsequently as executed loan modification a from quarter we of this and this list a year earlier As the it

loans we rating office past earnings the those risk X. our to consistent of with highlight During quarters, quarter, in a And downgraded two we loans supplemental.

we and Minneapolis processes loans increased further weakness Philadelphia, reserves in reflect office have the in our the to X-rated this quarter and two respective the our commenced office sector. sales properties, sponsors on Touching for

and mentioned, to anticipate option sell months coming Matt the the resolution we or assets. the with properties some prices in we forward on the and In path own manage case, As ourselves. both will the either evaluate determine appropriate

The of watch XX% properties two positive office experienced following in is larger DC challenged markets, Class two Chicago. Circle leased. the new near more have both is leases of by two well-located properties a are Dupont momentum Washington The by recently. secured the is said, recent A the office and loans backed list loan, which D.C. and That X, leasing

central is property submarket. asset A also and in Chicago Class a The the is located loop

square outstanding currently XX% leasing, the recent with XX X. loans is balance Of risk rated office to the portfolio, along eight property vacates, known our feet half some XX,XXX are the principal in of of equating leased. Following loans,

X.X, X.X our the through X.X% year-end. of broader we portfolio debt scheduled our X, portfolio loan and company's median of and average a of is average yield remaining. entire date. weighted rated of segment across This in rating April and is with lease XX% XX% portfolio XQ Class collected office a was risk term The of and portfolio weighted the the with risk consistent A payment leased of interest payments years XXX% XX% average

$X.X finance times only. sources outstanding markets billion, how diversified marked fully for billion is loan remaining An financing of or important volatility the particularly non-mark-to-market our financing in capacity. $X we to KREF, capital of with totaled XX% and senior balance quarter portfolio. credit our differentiator is undrawn is end, At

multiple financing KREF only managed not is bespoke CRE differentiated but financing CLOs resiliency two in facilities sources, of also a diversity of by these and the number which includes partners. supported

type single exposure of outsized We across categories. on financing are not with of a these any reliant no

billion in warehouse December facility a and quarter, facility by challenging X.X to repurchase years between $XXX and environment, in financing roughly the extend aggregate by million an were we Additionally, million the $XXX able March extended XXXX. first years a two macro banking two to to we XXXX facilities. a In $X.X

KREF is a Xx leverage total of of with quarter of end. capitalized and ratio debt-to-equity a look-through as well ratio X.Xx

and XXst, As corporate of million of revolver we had million of March $XXX capacity. undrawn cash $XXX

nearly million $XXX and senior addition our unencumbered of our position bringing loans, to unpledged facilities, billion. In plus we credit total $X liquidity capacity underdrawn this, to on had

sheet As May capacity the maturing month. XXXX ample notes convertible noted, next balance retire to the revolver we have our cash plus on on

has note match excluding secured and maturity convertible for term maturities KREF debt nearly the no financing, Following years. X.X

Thank you for us joining today.

your happy questions. to take we're Now

first the And Please Fargo. Don Instructions] will be question Fandetti Wells [Operator from ahead. from go

are the migration more to you and then Can quarter of the you about given pressures a just at where those? I bit looking not Why sort the just And environment Xs we what new talk a reserves the in X-rated and little getting just guess, to Xs. build you're office? today loans every and economic move drove scenario

migrate. I about and loans overall to leased, by And joining, of first that extremely continue of moved well summarizing around from Patrick risk to a some the new portfolio, the Matt. long-term in a markets Don, our that the nice you exposure, did for office strong some well remain it's not that Thank an loans office When X. start and addressing we'll see rating I think as within expectation a three it's that think loans perspective. why those you job certainly, of can which they're all our we leases office are question

the all certainly we component. not every look think are quarter transition big a we with you currently, So of About that and evaluating of the there's comfortable to and it very any for on the half still loans feel portfolio in changes, as just kind start about side. the our at expectation, but office that

think office, particular, work policies the well. in GSA Chicago did a of transition is particularly terms DC the we those weak impact has as got over, market some of that of I for in markets softer ones home In from those of the and X, And obviously, tenants. are

were And seen lot some the that even those assets. those at that leasing we've transferred momentum despite reason why of so in of a at was time the

Thank you.

Thanks.

from And Laws the Stephen question be will from ahead. Please Raymond go next James.

the if reserve valuation Xs we we of general should then for talk that that Hi, And Matt a read of read of the Patrick, and how the and imply versus the portfolio? in Xs versus origination? for that good allocated kind the what of - remainder into assets X-rated kind new allocation, does valuation that think the about can rough maybe morning. kind you of the or about across

morning, good it's I'll that question. Stephen, take Patrick.

sort X-rated those. magnitude if XX% if those little yes, those just about about we total our bit against you half our to of there, in half math total the allocated XX% And you than the on loss that is loans. loans then implies So a of kind of reserve, apply was of reserve more of had Xs, our indicated think to what a

our of remaining loans you If our remaining look those remove from portfolio it's assets. and all at X% about the CECL, across

Xs we're than obviously our there's attracting four our a the assets. But reserve analysis. in assets sense some three direction. and when some from loss our that's sort and hopefully, Now our seeing higher reflected a concentration to you with five, reserve those because move Clearly, jump of of a in expectation, gives of sort reserve are that

That's there. helpful. Patrick, that, I comments appreciate the

maturity With go how us - can next across about apply and I REO, more maturing, of an broader what determine the kind list of handful process maybe problem as month assets you dates? how in the you believe, sense months. even you walk of the of But those this start out color many watch through financing? early how specifically on recap finding discussions you makes maybe these loans. coming maybe one that loans will these ahead some new can provide sponsor, process How to the deals And of watch on play these and seller list how a

Thanks again the It's for that. Sure. Stephen. can Matt. question, I take

extensions give around willing also to transactions. help the to on to the we're acquisition. Minneapolis sales sponsor market the And to the those and we'd we're Philly provide So able modify where information are instances provide And asset well, as running X-rated with and process. effectuate a short-term on specifically two be potential where and our is those loans able existing financing full obviously

of So there. lot there's a flexibility

a owning about what commissions to and real improvement from cap environment in similar a versus in we're run like current - detailed the In kind leasing KKR leases perspective, a and market analysis, finance what sale terms terms and look running within of would factoring of does very go-forward rates, and of equity team potentially think costs we how is the on estate the obviously. for return

all or evaluating that a buy just sell buy make or time. So at we're information a decision point this to in effectively

the color Great. on Thank Appreciate you. that Matt.

Please And the is Barcomb next ahead. Sarah from question from BTIG. go

everyone. Hi, thanks

it taken playing of weren't earlier, and talk fundings, prior on didn't quarter. with right of in a as Or where some didn't at it was to new function defense KREF like deals line originations any maybe given might about are now? that a those maintaining there peers finish that - you've migration? any its you look why both have as quarter talked you and mostly So the watch now spreads cross attractive sort and they look the the while looks even you with liquidity about Thanks. executed liquidity Can respect preserving are list just

Sarah, it's that. Matt. the can I for Thanks take question.

It's KREF particular, think normal until really latter I point question. market we for about environment. the into liquidity get just a in more preserving of it's your more

a new So weren't lot looking at we quarter. the for of fundings

of at business mentioned We call, companies. behalf We from we away have the on insurance on lend on of behalf here Of credit larger we KREF banks. lend course, a estate real KKR. as

despite private three of We do you active. think some banks and like behalf are attractive. in active, I think have are is are banks a today. funds insurance active, it's market it competitive lend of market. debt fair we the actively very lending very all And that of the the And those the We are on foreign may We market. companies see, and regional headlines

down. I'd have a lending a have conservatively albeit actively lower the everyone the - at still in types just the LTVs values come market bit market, so So lending and because is say little down basis almost more postured, come are all

And now. things we as stabilize, overall So one the pretty within will out we of come attractive right to be a segment market first hope the KREF and obviously, find REIT be lend lending it to mortgage again.

And one you. Thank one. just Great. more quick

there office that XX% remaining So level XX% where you Or incremental of Are expirations investors that signs other lease NOI you Class any risk about? bucket? there the for segment, A, any be know talked at that how could should think book, upcoming X-rated about property to indicators the leased.

have the lease mean mind nothing these from leased multi-tenant most not long the a which of I'm re-leasing to but some sure for it I call these time. just But those, that them on - of the we some are perspective. we're and are given I so for well focused terms on a there's think expiration, one like in median wealth - - very - pretty part, are near-term a particularly do one comes from

me. for it That's Thanks. Okay.

the is ahead. Jade And from from go Rahmani next KBW. Please question

mean, remaining loss. But levels given XX% I then their are a below X-rated math you on substantial very much. provision that, assuming loans, Starting CRE The CECL million Thank doing XX% your this was the like addressing CECL just risk was reserve, reserve. seems some by to would portfolio. it with about you've XX%. $XX those surprised reserve taken something XX% bank's to reserves LTVs the clearly X% below that's comment of quarter's the far I loans. I the X-rated imply risk XX% on

USB X.XX%. two at X.X% at Just Fargo examples, and Wells

you're comment about So adequacy overall reserve how it? you on and thinking the could

I'll it's that. Patrick. take Jay,

I in it's would guess, against your the progression. a of, loss, noted, year, X-rated reflection got, losses question, really we of ourselves think of as asset view had where this realized latter where these yes, you So part kind Clearly, earlier heavier the loans. this of sort in terms we a with we've of I

would would remove or that overall Think we of to number. of the when we're and part looks remove significant expect XX% book, more book. that get portfolio it, of pretty those office a component and normalized already a you industrial, assets, our some percentage loss a multifamily up to that's heavy clean to office what also start we When that start like we about

think bulk further this assets, we the deteriorated an said, the reflection of clearly, just X-rated think change was the X-rated in I both as that, since across quarter, in terms I X-rated quarter. market that's of But we a a these - a and increase fourth assets. saw it's of and assets

or losses loss those through. carried so And reserves

we the portfolio. feel level. at Obviously, But across continue are adjust So the quarter, like moment, we we'll to appropriate. moment, feel and adequately we we're reserved at evaluate like at the right as the next we'll

you Looking do fully market on with pretty debt eight cap today. is leased office Those loans secular it the or the given some uncertainty around X. seem portfolio, somewhat occupied fully mentioned there. yields the statistics seem the with the at risk The where - close office to rated rates changes

that expecting So another was also office those to what's just touch be looks the tenant have Amazon does Plano, could wanted further the deterioration? construction there's Bellevue, you there. supply? a of I originated on Texas Seattle mention, loan. deals? on anchor if COVID. as outlook like for Are X. you the believe would Washington, rated there is in loan lastly, What quite that right DC deal lot before performance And risk portfolio The I large a prospects

take Matt. can It's one. Jade. I Sure, that

So this backwards. work just

out couple Washington, like loan, But the Amazon, that I think as that deals. for a you of strong a they - identified signed when think you have in that and lease years XX very Bellevue, for construction mentioned you threw that asset. those lease you credit obviously, tenant there a a about

particular going and about feel, of just tenant long deal lease the the we given strength think, of the to we term expect they're build So that to actively space, prospects and them good the occupy I that out it.

an the would be Plano. well. asset deal done that's So That's extremely Amazon that

leasing Dallas uptown bit the actually to But and momentum that Center. We market in a I all rates. and portfolio are close Dallas like We've of strong have X, rent the would couple in Preston little that experienced other in more a got assets lot. very leasing say, are

long-term - that deal that why has that's leases so well. some and as And

in we that at why confident that's that three and think - asset. remain I remain remains So

It's D.C. a remains a market. remaining that our D.C. term highlighting mentioned our market is I of But that two to office have lease very the three full U.S. tough are definitely you're And located the in a comment rated particular asset loans GSA we loans earlier. average - because long government. weighted Again, the

the So we've got there, good of we well. as And credit. yield about feel a lot debt length decent

of cash in - deal I that factoring a those but - that's think bit this is durable got three And lease long is what's a different, we've of long. going obviously, in how be pretty we're the long how lot very and terms. little to So for all flow is, each - how those,

with yield cap on to debt thoughts the are just office And what that? close rates, your

seen Well, quarterly loans, of we our a mentioned, value looking think I by these lot we've seen environment, rate when acute But not the we've across for where certainly, mean, office, the just - implied we're to given we leverage, on basis Certainly, think right, more widening increase don't of rates, when these as we're looking these our of, loans, values at the as and do but we're any of leverage of understand obviously the office for sure. is work cap at that asset stretch. in a interest above everything, on each individual revaluing we're on we the value deal. the X-rated assets when you

you. Thank

Thanks Jade.

Delaney go question Securities. And from ahead. JMP is the next Please from Steve

for you Thanks. And my Good morning, questions. thank everyone. taking

I'll the that nice color property? just as break appeal of property. any per a on terms impact from crime So there us the on homelessness ground obviously to you respect conditions are with unit, multifamily, give project that's or there or give a Could million possibly office. you units? talking the And on, what's that could the of to about The in going going West there some I Hollywood $X.X think

thank again. Yes. you that. the can for on touch Matt question. Steve, I And

it's for of that's relatively high sales. pound So in per amount. It kind And that, condo a right. built It's type loan trophy effectively you're asset the market. of best-in-class because was

particular were concerned well had with it that homelessness we sponsor. a around But it's located. about an So that very we to well not interest I in rate at moved nice or extremely And discussions is project. located, four cap It's some all. think a because modification crime

hope it's or really an value necessarily we to So shortly. resolve asset here issue, that not and

it. Got

fundamental. technical more like Sounds than

So thanks for that color.

Philly Just the your workout loan. on on office

to associated I that you hope guess books that? carrying carrying Just on or value notes. is it? junior this confirm, no your like mezz with at Are There's call we'd time, them to your

That the mezz. Steve, senior it's fully That's $XX written on was Kendra. correct. the off million

Got Okay. it.

senior put sponsor would has that you So the mezz up? obviously below be the

coming That's in right. ahead The new that's of is money that.

Yes.

that that month all Okay. then by X-rated are is that fact if loans, accruing those Great. interest you loans, four the interest five and or there paid four assume you on of quarter? those being are could, the each And still they should and the not borrower on loans we

Yes.

Kendra again. Steve, So

sponsors On the interest each still are paying are on The we current. X-rated current loans, still quarter. us

financial have statements, we both you'll on As loans notice the recovery. cost put of in those

ahead you know, the the not resolution we until go that amount again. until there's think income carrying held against that interest indicators can and being means a it income So as recording through is interest It's running line. that or we loan that interest the start there actually the are of

QX QX into you can cost And And point, loans interest X-rated to the quarter-over-quarter because see in rate you'll run $X on loans, is kind two recovery tell that another in on million. difference a it's quarter. at about went then from income when we of quarter-over-quarter of that loans. in the those nonaccrual. interest stabilized about on $X was million two income terms staggered it's go million QX. I The $X And the

Thank and the - was Okay. actually the about Kendra, because I --- loans you. not asking apologize, I X-rated

sorry. I'm

situation. But or wanted or all, one interest No, borrowers confirm it just no be problem just accruing a to are those to I all the I but loans I on would X-rated, wanted at each probably that another. Kendra, assume that no, make didn't way would paying X-rated special - clear, interest

full things - is accruing correct, receiving. That and are

all very you thank Okay, Appreciate the much. conversation.

Thanks Steve.

Rick question ahead. Shane Thank from you. [Operator JPMorgan. The from go Instructions] is next Please

book environment return At little of of of a in value. capital Dividend morning. this sense order talk bit reduce Thanks substantial which an In shareholders, support even allocation. is high ROE a the taking and capital you the Does the to mid-teens I dividend dividend on at yield shares? pretty want to XX%, about distribution the trading to Look, a everybody, is terms of to now. time, need north of basis, my for reallocate with the discount generate some questions to this be more same it high stock return aggressive make rates. a book repurchasing or in to is

Thanks, I Rick. appreciate can Matt, question. I the take that one.

Just as it few the I as relates you quarter, there. this seen and the to the think Obviously, we've dividend over about quarters. coverage, asked had last

ahead we interest environment. as And really from current look a we're bit, benefiting little the rate

easily dividend at of so this quarter versus earnings we're share the the $X.XX And a distributable payout. $X.XX covered

And think company about we earnings basis. on feel so of for just power an on earnings I the good the operating

that's when think so biggest the about And start probably to we consideration the dividend.

reserves and charge-offs. I But that implication manifest the about I yes, reserves But mean we think the into understand the will when that.

provision. there's is - also this of basis going And presumably, accounting in and earnings this dividend half is narrative earnings that over second it by it GAAP and there's earnings doesn't time, not so to charge-offs, for earnings And should the that distributable converge. accounting an and happen suggests that's But distributable distributable year. the impacted that of

opportunity buy to this situation wind potentially ahead stock not in and at that the yourself you're earnings get the dividend. below distributable up a also going to is And where of give Why discount? so that

touch on buybacks. mean let the share I Yes. me

sector think of think buying we'll certainly liquidity in versus stock terms when near the in we've I the peer bit the volatility back I what's to attractive continue terms in certainly liquidity it - and consistent a been pretty heavily, set thought the given banking I the here in on of stock more little we was the and going attractive. been is weighing market, think overall prioritize now. term. We've in

relates the And And to the couldn't thinking I decision. math significantly, a certainly, dividend then dividend, was decline the that that, as of going and understand - sustainable the that we if thought we evaluate power is what's would Board-level the the to company. you're we that. And earnings sustain it obviously, through

looking and terms sloping of now, the little portfolio, bit see don't right the end at right environment now. what even the current power of what you're the describing existing towards thinking forward curve, which rate a just the obviously interest of But with the from in we're downward the company with year. is earnings We through

if be again, it something - projection have or we're is it'd to happen manifest starts evaluate, our in then not to that So what itself, we'd not current but seeing.

the can remedy you Got it. a to a liquidity not And fix is end much you quickly to that fair. look, of fast. too day, the lot having harder choose liquidity situation as Totally having at enough is

agree with XXX% that.

Thanks guys.

Thanks Rick.

go is And from Jade Please a the next Rahmani KBW. question question from ahead. follow-up

you Thank taking the for follow-up.

on of create hand. paid become leverageable? Are those business in good repayment. be clearly expect reduce - your that As executed more on they nature, of that sold, to have liquidity, be or That there would perhaps about it relates really become convert the well their things deals or items in off that news to to that you how are thinking you the terms plan cash refinanced liquidity the deals dynamics portfolio post there will

light we that. multifamily. can look we Yes, is our though take When I even Matt. say Like portfolio to a this Jade, have it's we quarter I what the year - a type fully obviously, repayments on portfolio, QX at property repayments. - was would year, largest of light in - get our expect you

and capital, are guarantee what insurance with financing today's you, property, especially a compete those see most companies we efficient in not at we cetera. them the where against lending et And can given the multifamily stabilized for I stabilize, lending as we as market agencies our are insurance

as and of on being nots, the tale the cities favorite obviously have for the there's It have really But right think liquidity. in amount of to which liquidity for lot also terms And increase of office the is of we're course So course, have couple markets going classes I now. two us not of fair asset a side. a with the there's well. quarters, next the capital get of will over a of repayments opportunities

right it's piece now, but is a only it's obviously, - a the very small small, capital with structure. convert, the million overall of a - So $XXX

got So like that pay said, we've cash to you down.

And what things to insurance of there kind collateral? very there is assets, Or very issue be the to a leverage, to A interesting. high-performing of participations be possibility Is CLO affiliate you capital and nature? markets think Notes transactions, that low best do selling taking the opportunities would on doing company, a your possibility

market securitization is the mean, I open.

we think that So a if existing I reinvestment like certainly right have period we that priced because still we are that attractively. would don't wanted facilities I could. to quite would explore route in that we and our think route, CLO be now go

So of need a we one I think don't those. new like

it don't for the corporate some it. think of finance think for cut would type of we - the along a portfolio. of us, notes corporate selling about think most be definitely on more some opportunity us. we more option lines to of I I existing loan And could any need

of sell loan. whole it the think I could some just we

now level of we're but think not don't I we right this - we're where we're liquidity. - in - again, And scenario that need

we're enjoying now, kind right higher So the earnings. of

we mean, I liquidity. of liquidity. of lot have a almost have billion $X We

was that market that we're the attractive, were had something down we could if So it's and But we that actively option - had not an open clearly, go pursuing. path.

would to up, Just perhaps be a that presumably another or preferred follow convert?

We've we've the done done what done We've Loan Term we've So converts. seen Bs. done preferreds. you've in mean right? past, I Yes.

So of those at. options those we look three would - one

Thank you.

Jade. you, Thank

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

care. questions. out us if Great. have you to me this operator, Take everyone, reach morning. any team and Thanks, joining thanks, for the or Please here

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

now may disconnect. You