TPG RE Finance postpones dividend amid Covid-19 uncertainty

By Wendy Van Sickle

Columbus, Ohio, March 23 – TPG RE Finance Trust, Inc. postponed its previously authorized cash dividend for the first quarter of 2020 amid the intensifying Covid-19 crisis, according to a news release.

The dividend of $0.43 per share of common stock will now be payable on July 14 after, subsequent to the March 18 announcement of the dividend, the worsening Covid-19 crisis caused significant volatility and widening credit spreads in real estate securities, which have negatively impacted the company’s highly rated, primarily floating-rate CRE debt securities portfolio.

As of March 22, the TPG RE held a CRE debt securities portfolio with a total face amount of about $960 million, which portfolio is pledged as collateral under daily mark-to-market secured revolving repurchase facilities in the amount of about $760 million.

Fluctuations in the value of its CRE debt securities portfolio, including as a result of changes in credit spreads, have resulted in the company being required to post cash collateral with its lenders.

In the current market environment, such fluctuations and requirements to post cash collateral have been, and may continue to be, material, the company said. If the requirements to post additional cash collateral continue to be material, there is no certainty that TPG RE will be in a position to continue to fund the payments.

In addition, as of March 22, the company held a loan portfolio with an unpaid principal balance of approximately $5.1 billion, and approximately 48% of the company’s debt secured by this loan portfolio consisted of term financing, including collateralized loan obligations.

Substantially all of the remainder of the loan portfolio is pledged as collateral under secured revolving repurchase facilities. The occurrence of certain specified credit events with respect to the properties underlying the loan portfolio may result in the company being required to post cash collateral with its lenders under such facilities.

The company said it is engaging in discussions with its lenders and other potential sources of financing, but it cannot predict whether it will be able to agree to terms with these parties on an expedited basis. The company is also monitoring the potential availability of government programs.

The San Francisco-based commercial real estate finance company is externally managed by TPG RE Finance Trust Management, LP, a part of TPG Real Estate, which is the real estate investment platform of alternative investment firm TPG Global, LLC.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.