Loading...
Docoh

KKR Real Estate Finance Trust (KREF)

Participants
Michael Shapiro IR Officer
Christen Lee Co-CEO & Co-President
Matthew Salem Co-President & Co-CEO
Patrick Mattson COO & Secretary
Ryan Tomasello KBW
Steven Delaney JMP Securities
Donald Fandetti Wells Fargo Securities
Arren Cyganovich Citigroup
Richard Shane JPMorgan Chase & Co.
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

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

Third Quarter 2019 Financial Results Conference Call. [Operator Instructions]. Please note`, this event is being recorded.

I would now like to turn the conference over to Michael Shapiro. Mr. ahead. go please Shapiro,

Michael Shapiro

our to the Real am third co-CEOs, Matt by Welcome CFO, and earnings Nagaty. Mostafa joined Finance call our Salem; and Lee for quarter Chris Patrick the you. Mattson; Estate our KKR Trust today COO, Thank XXXX. I

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

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

income with share. share Based with million million to per dividend of the per value June In share XXXX. GAAP we the a annualized yield of an $XX.X of reflects dividend closing per per $X.XX share third XX, consistent paid quarter. XXXX, stock or third September $XX were book XX was on of earnings as XX, per the net October was $X.XX October, price or as respect $XX.XX, X.X%. of Book core value $XX.XX, our quarter, our share. For $X.XX Net

we'll in to an is Board discuss fourth thereafter. dividend, meet scheduled to make Our the quarter announcement shortly mid-December and

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

Christen Lee

quarter our for morning. joining you, thank for and call. Good you Michael. Thank earnings third Happy Halloween, us

many our following also which potential quarter are seeing of quarter the originations benefit over to LIBOR past record a already This a year highlights the second floors, tight of quarter. negotiate the our from. capital of in earnings base It efforts reflected

depth the strategy sponsors. of an and The on later preservation transitional a our competitive on of execute allowed our compete approximately assets investment more win we the focused since deals. resulting in relationships in In the combination conservative team experience investment have approximately million. than to structure, lending of Through continuing XXXX. we environment, In $X.X fair priced us our third larger liability record-funded strategy, our economic totaling of closed loans originated of conviction liquid cycle, to and in billion, share $X.X and our quality. X increase of have We markets $XXX continue brand the the portfolio still quarter, XX, we October attractively on quality stages credit end XX% of and to billion our loans of ever in capital a a of year-to-date,

originated we Notably record calendar Over over inception, now have volume. $X.X made our billion, we've the last origination approximately XX over loans. year XXXX increase billion $X.X of XX% a months, since

In to addition, to currently of loans conditions. under $XXX exclusivity closing subject we've quarter, customary expect built a robust we within million the pipeline close of that another

and industry, as strategy see deployment will in mismatch, capital detail. origination to executing subsequent this repayment of we and a markets further will due quarter timing to course, that for repayments began to end. in To management fluctuations typical cash potential the strategy the Patrick closings, implemented it's Of new navigate activity. better we we continue timing discuss

CMBS of our further us simplified liabilities. our assets our investment we allowing billion of quarter, to deconsolidate through sale balance portfolio, sheet and approximately Direct This in the $X remaining successful

respectively. the company and in X investments invested transactions. a reminder, The our face multiple full quarter totaled X.Xx, B-Pieces XX.X% of IRR and This of investment exit from a invested. equity in in of first bonds and value between gross capital million the $XXX second results As represents investments XXXX, million these quarter approximately and and of CMBS XXXX sale $XXX realized of

continue shares. we on creating to our Lastly, in liquidity more focus

that We with XXX. the will recent S&P the the institutional our pleased are in SmallCap inclusion company's We further inclusion for drive shares. believe demand

the to broadest to array trading with volume accessible We will being to improve the the a continue company on of of goal focus ways shareholders.

the economic and many risk fundamentals In At capital real and backdrop favorable for invest summary, we Real KKR, remains have markets business. structure remained in our assets. estate capital other and the open estate strong. across across

direct As lending yield-focused relative returns rate across investment environment. absolute still and that real we and broader real landscape, estate risk-adjusted in offers the look this we believe attractive, estate

through encouraged and by are relationships sponsors our and We pipeline with our of seeing intermediaries. deep we're opportunities quality the

without to will to shareholders. continue risk-adjusted are ability returns deliver attractive to quality sacrificing confident our and credit We deploy capital continue in our to

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

Matthew Salem

highlight from conservative LIBOR good and of consistent Chris, the differentiated underwritten loans details And on recent plus additional quarter. more originated by LTV The some XX% detail investment X we levered In quarter, provide the our senior are at and start on like focus, is loans weighted morning, our to In activity. on XX.X% respectively. which order for these providing rate everyone. totaling loans again, a basis, investment portfolio. coupon million. this LIBOR, existing average X.X%, to our the Thanks, spot average third we a IRR I'll $XXX weighted the with and floating loans would,

with bear me. please So

of bidders. potential the and XX%. to end. leases of has plan expiring vacancy XX% to quarter reputation from with at sponsor's timeline secured XXXX business billion Class stabilize by is July, with and foot as we a global loan square XX% loan was differentiated million closing tower, momentum X office a and lease a directly after Chicago's with $XXX property was loan investment the meet Leasing A million real assets market remaining the XX-storey, management. this been us leased We occupancy under estate manager in submarket. sponsor, The an loop our to central source ability First, approximately $XX property strong sponsor's sponsor leased. over of renovation approximately underwent The other located made The approximately and in in comprehensive

is discuss will this in loan, transaction, has Colorado already new minute. us for our another and While which led a relationship I a it mixed-use to

on the the made property in we with a a back largest mentioned, loan Class operators successful our in Chicago, including in located feet million a the of located development space, complex the properties of of of to Since apartment sponsor executed a acquired the made X remaining for enhancement multifamily renovation X comprehensive currently loan Colorado. $XXX and monthly comprised a and August, square property in of of multifamily amenities the construction of a delivered and sponsor, XX%. refinance plan, the rent which just retail has of the repeat interior MSA. B deal in March occupancy property premium units I XXXX, Atlanta exterior units. achieved XX,XXX stabilize refinance the The luxury approximately and the acquisition, one United August, In mixed-use of plus in XXX sponsor properties XXX-unit multifamily million The XX%. In Denver, townhouse sponsors multi-family renovations, to retail increase complete of landscape we and and $XX.X States, late XX% the property one business space to near-term is the plan from to

management Post repeat and Class beds. to sponsor to XX% sponsor is occupancy. $XX.X by XXX properties place market by a a its estate in housing loan property lease-up $XX.X are concessions more consisting and to a Texas. asset At made secured The local achieve X,XXX stabilized million sponsor, units XX units billion. plans complete we closed than September, we a valued real X with and quarter in was loan XXX newly-constructed investment property student rents than The over secured portfolio, $X.X more the closing, building multifamily A additional approximately located off Finally, firm burn end, of and the at million Austin, leased. in

another with In expected which pipeline addition, under the close of loans exclusivity, forward to are our $XXX million remains quarter. during strong,

As always, subject conditions. are customary to these closing

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

participation sold quarter In us Virginia end, our to we multifamily capture loan, Arlington, a to $XX economics. million on subsequent incremental addition, allowing

on the we in to in seasoned calls said repayments borrowers portfolio see execute expected our business we a year, as and the our level higher As our of earlier plans.

can and predict, year half the to the during still and the match in we expect year. the of of second $XXX the first were half of difficult While for back quarter the relatively to repayments light repayments repayments total third the be million

Turning to portfolio. our

is As diversified across are September XX% is both the and XX, $X.X and our and million with in The office obligations. of XXX% another $XXX of balance comprised billion funding geographically totaled Notably, of performing. the loans loans senior of portfolio. loans XX% multifamily types. property invested approximately portfolio future

are franchise loans sponsorship, and comprised of business year-to-date In and summary, transitional pending with closed of the we brand closing of estate $X.X a a institutional approximately have opportunities plans. portfolio, or differentiated today. light strong pipeline The with real delivering as of billion

over the call I'll Now to turn Patrick.

Patrick Mattson

Matt, and morning, you, Thank good everyone.

Our which of $X.X rating risk totaled a the the X-point of risk end on billion at second quarter. of rating quarter, a X.X X.X the average compared has scale, at weighted to portfolio, a end

no a addition rating of average improved. rating, the portfolio. of risk the During a the in experienced the new rating while a X repayments this reflection assets weighted with X was investments loan in change quarter, in The rating assets deterioration of X of and

Additionally, above with AX. have no loans we a rating

me the minimal no on and that the minute to co-working a have currently co-working certain very exposure recent WeWork on exposure We tenant potential spend and assets, of Given some another publicity office let WeWork, around exposure. tenants, impact our profile.

feet of end, we As with loans rentable X.X net office XX had million area. square approximately quarter of

X% is by feet XX,XXX than or co-working Of tenants. of that, portfolio square approximately our less office leased

sources, continued decreasing our have capital funding been and a we diversification deployment improvement leverage on and focused the efficiency. with in With LIBOR, matched

generally Xx of on we loans, on senior reminder, source financing. new Xx a to As a the leverage depending target ratio

a XX% XX% have non-mark-to-market financed quarter increasingly we secured grown outstanding of we have at which rate. made loans our at up As our advance low end financing, financing,

and As total respectively. quarter ratio our and leverage of X.Xx, debt-to-equity ratio were end, X.Xx

LIBOR-based loans. portfolio of was quarter XX% of As end, floating rate invested in the

LIBOR the the to a increased in quarter. X.X%. floor through third average declining year-to-date income end, we floors we As floors originations benefit previously, LIBOR and protection provide of environment quarter XXXX a weighted Notably, our in discussed those have began of rate see

which, has to close you the our in we see to of income approximately see least floor X, continue of as chart of the floor liabilities further can a us average in our materials, on weighted XX is should supplemental on to and incremental LIBOR capture declines Additionally, the half enable at if portfolio Page X%, LIBOR.

asset, single Finally, mentioned, loan our and discussion origination to and of we borrower strategy, investment following timing quarter to targeting repayment aim single subsequent cash short-term the with securities manage investment to liquid target mismatches. as implemented CLO Board, will bonds. The rate from impact grade, the better floating end Chris CMBS and CRE a drag strategy

in of of remarks, Given securities. in that the investing earlier this described expected $XX XQ this a CMBS repayments month million Matt strategy his we purchase with began

We In was our joining the summary, again, origination sheet remains pipeline another our sale pace quarter. us investments, our it Thank B-Piece today. of simplified continued with and robust. and we strong direct remaining strong balance for the you,

And your to now happy take we're questions.

Operator

[Operator Instructions].

first question comes with from KBW. Rahmani Our Jade today

Ryan Tomasello

This Ryan for Jade. is actually on

with Just set current us the appropriate And commentary for the you provide XQ the with IRR, recent starting off, ongoing how the environment, coupled achievable will is on if basis? returns very think if cited was rate go-forward to you that low markets. I but dividend are? be spread strong, level where lending you the IRRs was on if incremental the hoping clearly, can future these feel thinking you're on a double-digit about you just an and originations in level cuts wondering compression some potential And

Matthew Salem

question. quarter. Matt. And we're Ryan, those couple did the I'll this cover Obviously, we very It's -- focused covering thanks to as the try for questions. on a I'll cover of dividend.

it If from bit does benefit a of portfolio, that. so little you forward look there'll positive be rate from curves, some floors, at the a impact the thinking LIBOR about if you're existing impact, some

income, of and sustainability lot we're going will factors we of to to the the I factors, see it that Board, conditions taxable with think and other and financial depend a on it's what have our different earnings. discussion a have ultimately,

And of factors can control those we and we some some can't.

can control we're And rate a it's control. I KREF I'd hope profile risk that curve. can on And competitors that as we what are. say evident we're of what than we forward really positioning good our different the is a focused example

portfolio. sponsorship, created -- think institutional through we've and If types defensive you volatility and look of lower to at quality, we asset property kind our the high-quality a top within business of level we plan transition, markets, each that look underwrite which

we you thing going credit risk curve. And one are we're not the that's to to go going the change not will. going if So our out not to We're change. DNA, --

I financed a when basis. of and will almost best-in-class So which three -- and an be yield at portfolio right, is -- earnings what quarters, non-mark-to-market it of think cost the majority -- yields the output of high-quality our capital, which when it's is on today

So about we're that's now. thinking kind of right it how

last, in so. As I mentioned portfolio or LIBOR has call before, the months XX been the originated it

have near-term so in floors form some protections And the LIBOR prepayment of penalties. we and

Ryan Tomasello

that unlock the in Yes, that's Great. give as Do to drove just moving lending on just helpful. really color into you you And us over saw to IRR view sale. on really book? more what CMBS you for capital the the legacy way based a strong then very bit execute to reinvestment core decision Can a that? that

Patrick Mattson

that Ryan, it's I'll Patrick. take one.

year the at we pretty sold of our sale. in last second quarter, through nice majority less pretty here, recall, which advantage residual value. gain robust a you point and had totaled and took than CMBS portfolio some as million positions in $XX market that a the So recognized of that We

CMBS of the side. sort about our quarter the that this balance of that. of for billion, of we is extension, gross we a up liability value kind sale that $XX view And by this clean-up on $X and a in of sheet so resulted both asset side did And million

able at to So XX% that we through positions. to loan this point, effectively And were we continue sale. senior this be deconsolidate

Ryan Tomasello

that on cash more you management release. one announced guys the with strategy the just then And

of wondering strategy? bit of expect use that You mentioned use kind just a to borrower single if you securities, asset, in to these give what and on us you're leverage on CRE but targeting if sort targeting you're metrics you single plan can you positions? ROEs? any CLO more What And hedging for

Matthew Salem

that. Ryan, it's Matt. I'll take I guess

market an on a we And it about This what's supplement we available It's basis, cash. ROE to about to time. on be ROE We're more thinking today yield I there's as it's is of we -- about that get going a in on create we fully not and don't otherwise at perspective, can It's to think which, I that get little set the different we ratings fully get a target. think on lending really the from depend will buy, have It bit portfolio. range -- yield a incremental about levered ROE. our can way the return the -- a really management. cash trying loan replacing than would about our not it's replacing in core create really business. can

us that's available earnings be to think we against -- a little leverage us see you'll what's the put -- in we From in to that so how us -- available incremental amount of we'll bit about kind it in think what's just can portfolio. the you I of from the relatively terms financing versus And conservative of a market. see perspective,

Operator

comes question from JMP Steve Delaney Securities. with next The

Steven Delaney

like it huge The you the deal after in quarter. money have here first you. really the to had to amount you back true with third in power Matt, guys like coming Obviously, your to has that earnings start repayments of in seems deployment I'd allowed really with quarter. show settled

expect around could at quarter and the for range percentage ballpark would in And XXXX? Looking can the was like, $X.X the a make, the the low of range, gave and year's if that a off somewhere you portfolio year-end. pretty you high of you when in, probably paid first for just some When think principal a second you half seems seasoning, year, us about curious repayments of, like shot year. this color year-end ahead, of loans there you what at some you at and on look billion a of sort in a to It trigger come repayments? quick next average

Matthew Salem

relates I I think a as has transitional mean, think, risk either Sure. the the a on the we which, positive would focused lease-up duration Very we repayments, lighter amount I about say. it is of are stabilization, renovation to uncertainty it a lending, to future predict difficult from as it happen. shorter to to relates is, less that the way just perspective, to or

we so And that's positive. a think

potential heavier, One construction, the cetera. loans renovation negative et more that stabilize is is something of for compared less have little that that slightly the because expect the bit you of those bit a to duration little we quickly as would that's or a to

think have I loans that. we've slightly way seen the than and in think I year could some, on you our is so and shorter duration outside, obviously, a the about -- And come three

very I or a modeling very, perspective think something divide factor from closely, of it to So a our by we're would from less perspective. slightly my make balance but just monitoring sense three

Steven Delaney

realized that. That appreciate eyeballs. And I pretty question I you. Congrats Chris, stayed the this you to the of appear And inclusion, helps on that. had it. that out year have be shifting of frame over book I half is, bring the trading SmallCap deployment S&P to over certainly much guys with to in do capital guess the first your certainly now. shares us to market. But something

August apple, a of taken speak, so haven't You to since of the XXXX. bite

or of you the you're speaking the question stock right because big all a consider X of deal are a to you're aspects and frequent piece for trading your that because So bar doing How more doing market to million things? for sort liquidities, to the you visibility, this day. of do is, the with is about need high high valuation technical guys market cap guys follow-ons X to fundamentally, -- how million --

Christen Lee

we the the I very talking we're even IPO our earnings share doing that be strategy will coverage post-IPO proceeds. a very per to bit mean, I dividend lot. with share, the we're our that view think end capital a prudent been there all we markets. per immediate about prior is very now and our sure think has things. We're is And extent about are of about day, But we accessing stock use making adding the -- and earlier that an consistent we sometimes how to on right at frustrated little we something of is of It's kind focused and Yes. think are think about capital the we only price.

have capital short on So we I think us to in the that's available balance term, sheet.

Matt are the -- the good window in a least in at mentioned, near repayments looking pretty have into like As what we the term.

like to plenty capital we we feel judicious. So of we have be but will our fund pipeline, very

course, thoughtful know a pretty metrics. our you with business Of and capital but the all and per we the focus at about other bring earnings share disposal the have ATM how share we on be we'll count avenues in increase

Operator

comes with Don The from next Wells Fargo. question Fandetti

Donald Fandetti

you Quick little new question that it about that's transaction? little Were on talk bidders just market's at competitors the Chicago to Are seeing increase. same other on table? just the And a environment? then the group bit getting could Or I know the a loan. continuing secondarily, bit the competitive CLO is you there been more aggressive?

Matthew Salem

it. Got

situation. to the a there. was Chicago again, But So It competitors was question competitive direct the it sponsor with were on there that first few answer on your a deal, deal.

are think pop I competitors. relates second to, was, we I don't it think seeing up. new we're new names any seeing your question as

make to same who can -- of the a been relationship it it vendors. institutional the larger larger mind, really consistent does really the and speaks the it's sponsors. the mix my years, few last the Over loans In pretty with how's --

million $XXX very, call It's of over that So the size. to consistent the segment loan been I million very within $XXX it, market, time.

Donald Fandetti

you the lending? you of cash other of Or different classes aside the Could here have areas? plan different stick sort are to at considered asset duration, look sort And core implemented? longer CRE going management you that with from you on

Christen Lee

it's we definitely asset different explored Don, Chris. Yes, classes.

a real in portfolio U.S. the As we structure where of much assets large you know, invest the broader and we have a capital estate own business across

interesting, also the net have yielding given We and a late. seen on that cash targeting of and from been a not a we've basis been anything overly as yields basis. gross It's

the focused the very evaluating the So right yields But risk the returns similar on that now, different transitional are lending strategy, that taking. in given justified create we're return the risk by to seeing the always that extent ways we're market. we're we're to

Operator

comes next The Arren question from with Citi. Cyganovich

Arren Cyganovich

management of cash repayments generally that's strategy would down towards be? Just but just to paying does some it's on and management the of this how just And why the assume of the think you facilities, works, how always of going cash dynamics piece maybe just logistics one I maybe big necessary? the go that this

Patrick Mattson

one. take I'll Patrick. Yes. that It's

So have our when of we we about I debt repayment think outstanding. different is several Certainly, repayments, one think options. that's a

more types some optimal of it's non-mark-to-market we or our For the really that's in not necessarily place, CLO And whether facilities way. other term, financing, that's applicable. of not structures, get as

opportunity we getting invest we at an bridge we're we capital. that trying or the then then as time. to originate a deploy on it So short-term and to period cash, when manage we over timing that a And can we're asset, basis, -- that short a get look to if re-originate of sort can to of

Arren Cyganovich

Okay.

In you'd weaker within broader or highlight weak. of market particularly is about gateway New kind Are stronger? as the terms York of in any condo markets that particularly CRE an being other seeing City niches article you there the

Christen Lee

Chris. It's

very I definitely end exposure, the bit market. we but a Broadly, we We high like exposure think maybe the is of -- starting oversupply, City especially with we the have luxury it's little condo the market market. a the New have. experiencing of York

you So much sponsorship, been unit that on the to and buyers. sure array even potential of really broadest mix focused from point have our perspective, we've price very make location,

a across broadly want has weaker that the all in the of have We some Clearly, many ultimately for and they of just been seen companies have space that formats least environment retailing the are given parts that at market footprint weakness. showing omni-channel almost to retail, other more the market.

side, pressure, the experienced the side. revenue expense have of not also some urban locations just pressure, think certain but have hotels in experienced markets some on I on the

generally a to York of City, up. margin has deterioration, little flat move have expenses bit continued seen been think RevPAR and I as to down we've New

really And we at has really the sector most lending we positions where of shorter we been And Matt be. own plans been and things our office and only very where more in we've which have looking so always on picked the on duration of thematically asset it business are thinking in of most majority course, around or what want changes portfolio. or classes small where we're on to focused very, spots under now, we've defensive on that we're we a hotels et like and touched assets, where much this doing earlier, our multifamily depending And cycle are and condos, cetera. right in market. But focused

Arren Cyganovich

funding investment was student Okay. And around seems be to process quarter-to-date niche your the kind What one? thought that area? then That of or a loan. housing

Christen Lee

that business, that an It's and lot experience a our actually as over units it's it's just equity in. have area have experience have a X,XXX Christian. in platform market own we of is Student control amount and a actually housing masterclass we of a we We a tremendous group. --

and platform terms platform use benefit real estate So to how lot equity of and business. had works benefit that shareholders, in and that where vice of and versa did, we of this really own loan We to platform an benefits also this this that's integrated knew a expertise our it can this that when had the opportunity we an was the make having operator we we underwritten market. the area already

there, a but have where we So and to about that to be platform close have of a lot asset very their you we understanding very or markets market, strong have campus, experience, knowledgeable strong depending you of but be area have close to assets that's very careful not on how campus because class. to a an

Operator

next from follow-up is with Jade Rahmani a The question KBW.

Ryan Tomasello

Ryan again.

$XXX of Just repayments on of in north up first, guess, loans the on commentary the around fourth millions would for based closed the pipeline match half, didn't your so or million you mentioned $XXX second that I the repayments XQ. repayments imply And believe the following quarter. of I in or post commentary, somewhere

you might CMBS to of some quarter? So timing level enable as quarter to do in I Or you strategy see EPS expect cash new guess, you headwind into do that the this kind manage you that XQ's going the that gap? fourth fourth manage blips temporary management think

Matthew Salem

Ryan, it's Matt. I'll take that again.

that I X funding I'll net from perspective, a think make comments.

add we few On think have the fourth still we to to side, the origination quarter potentially pipeline. a weeks

that, and up. variable the and obviously, is that's So can numbers change go

side, exactly On And estimating, slip. of pushed seen things never it's the that's repayment clear. things kind what get We've we're can out.

anything, of using market So if new will that some of estimate. be that place. if funding, terms that help in an And we in net a had cash negative drag to clearly, program liquid that's kind then offset of

things drive earnings. I fourth think the that's will a combination quarter of those obviously

Ryan Tomasello

inventory And recently. that IRRs, talk incremental if conserved the your more of of originations, follow-up if on I then pipeline a the on get quarter? condo on And then we views yields, terms condo can us in of property-type geography? as kind those we second some competitors in are wondering market you And loans. what can of questions market. give guess, heard saw with other some I the earlier color about on We've was to what that on is comprised

get your that's still particularly to past, wanted thoughts are loans Just condo deployment done we've York? the if -- in in New an inventory opportunity, attractive as

Matthew Salem

property it what doing. Got pretty And we've and turn it's what's the to multifamily been types. that we've part of looks it to discuss Chris it. identified office all over and in Maybe then in right the first of and pipeline, But terms similar now, just what kind -- can take market. all I'll he is

middle Again, multifamily focused point. on right the well-leased been. through this the sectors We've we've lease-up are say, small down a stories been of side that innovation that it's small at So in similar assets their office transitional then a of way I'd lighter and the side. going on

Christen Lee

Yes.

inventory we it's would that capable that have yield not condo who that. an well on. focused the of area We providers say market, extremely developers. On given for for that's extremely and they're overly we're opportunistic I definitely liquidity an that financing that utilized of in top-tier really still loans, capitalized, really that there is is us for are sponsors, think bucket there's

market said, incredibly have focused but something that on, Matt it. it's still like does that So not we're liquidity in

Operator

The question with from Morgan. JP next comes Shane Rich

Richard Shane

we we're we in coupon spread when a apologize, around on anticipate am to on is to bit think as repetitive, continue rates. things as that know opportunity the this they we to apologize. also There basis. bit, I ROE basis, power. better so to much I was beta were curious little a little all-in recapture think people you scrambling curious rates about following And but about pricing current with very decline, on them rates of decline, going start environment, if to right? if a think that you if know rising. Again, saw a higher I basis be rates an there's And I'm an that low

Matthew Salem

Yes.

think answer it to I is, the seen. be remains

relatively rise, have As spread there's saw floor seen What coupons we that the market. the compression, rate forward as mentioned, been remain we consistent expectations we've is LIBOR with similar changed and obviously.

relatively stable forward all versus around LIBOR. So in have expectations coupons been

that widening, could Now for remains see a if I market. the you that LIBOR floor spread think question dynamic changes, that's

Richard Shane

there percentage of Presumably, we is obviously, And see that negotiating as rates move, it. LIBOR floors. X% high or better there? ticking loans is Got the down with some power

Patrick Mattson

was with originate at Yes, sit difficult to as as spot a adjust. now we some is I gap, And the starting bigger the gap when there you've certainly, even least rising seen Patrick. were LIBOR LIBOR market. the That we're are. start compression where spot X% very see where the and are at that's the what we market LIBOR what floors And spot and you floors see floors much floor. to the market a moment. reflective decline, of that the in loans. between it's today, now And think that At seeing is meaning we're think to in get market at to closer rate said, what the I if time Rick, they was those X.XX%, as that are the the rates X%

Operator

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

Michael Shapiro

Thank hesitate have please there's for and Happy you reach to very any us joining follow-up, don't a morning. much out, Halloween. this If

Operator

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

now You may disconnect.