Apollo Commercial Real Estate Finance Inc

Previous wording

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $696.3 billion as of June 30, 2024.

Current wording

We are externally managed and advised by the Manager, an indirect subsidiary of Apollo, a global, high-growth alternative asset manager with assets under management of approximately $751.0 billion as of December 31, 2024.

Previous wording

Certain external events such as public health issues, natural disasters, political and economic instability abroad, concerns regarding the stability of the sovereign debt of certain European countries, and other geopolitical issues, including the ongoing conflicts between Israel and Hamas, as well as further escalation of tensions between Israel and various countries in the Middle East and North Africa, and among Russia, Belarus and Ukraine, and the severe economic sanctions and export controls imposed by the U.S. and other governments against Russia, Belarus and Russian or Belarusian interests, have adversely impacted the global economy and have contributed to significant volatility in financial markets. Due to various uncertainties caused by such external events and recent macroeconomic trends, including inflation and higher interest rates, further business risks could arise. Some of the factors that impacted us to date and may continue to affect us are outlined in Item 1A. "Risk Factors" in our most recent Annual Report on Form 10-K.

Current wording

Certain external events such as public health issues, natural disasters, political and economic instability abroad, concerns regarding the stability of the sovereign debt of certain European countries, and other geopolitical issues, have adversely impacted the global economy and have contributed to significant volatility in financial markets. Due to various uncertainties caused by such external events and recent macroeconomic trends, including inflation and higher interest rates, further business risks could arise. Some of the factors that impacted us to date and may continue to affect us are outlined in Item 1A. "Risk Factors" in our most recent Annual Report on Form 10-K.

Previous wording

For the three months ended September 30, 2024 and 2023, our net income (loss) available to common stockholders was ($94.6) million, or $(0.69) per diluted share of common stock, and $43.0 million, or $0.30 per diluted share of common stock, respectively.

Current wording

For the three months ended March 31, 2025 and 2024, our net income (loss) available to common stockholders was $22.9 million, or $0.16 per diluted share of common stock, and ($107.6) million, or ($0.76) per diluted share of common stock, respectively.

Previous wording

Net interest income decreased by $4.7 million during the three months ended September 30, 2024 compared to the three months ended June 30, 2024. The decrease was primarily due to placing our Massachusetts Healthcare Loan on non-accrual status as of July 1, 2024. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Current wording

Net interest income decreased by $4.0 million during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. The net decrease was primarily attributable to lower average index rates and a lower average loan balance during the three months ended March 31, 2025 compared to the three months ended December 31, 2024. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Previous wording

For the three months ended September 30, 2024, we recorded net income related to real estate owned of $2.3 million, compared to net income of $5.3 million for the three months ended June 30, 2024. The decrease in net income was primarily due to the seasonality of the D.C. Hotel's operations which led to $3.2 million lower net income from operations, prior to depreciation, during the three months ended September 30, 2024 as compared to the three months ended June 30, 2024. Refer to "Note 5 – Real Estate Owned" for full discussion of the reclassification and operations related to real estate owned.

Current wording

For the three months ended March 31, 2025, we recorded net income related to real estate owned of $3.1 million, compared to net income of $4.4 million for the three months ended December 31, 2024. The decrease in net income was primarily due to the seasonality of the D.C. Hotel's operations which led to $1.3 million lower net income from operations, prior to depreciation, during the three months ended March 31, 2025 as compared to the three months ended December 31, 2024. Refer to "Note 5 – Real Estate Owned" for further discussion of operations related to real estate owned.

Previous wording

Our General CECL Allowance decreased by $0.9 million during the three months ended September 30, 2024, primarily driven by the favorable impacts of portfolio seasoning, earlier than expected loan repayments, and transfer of the Massachusetts Healthcare Loan to the loans evaluated for Specific CECL Allowances. The decrease was partially offset by the effects of loan originations and a more adverse macroeconomic outlook on our office portfolio. Comparatively, our General CECL Allowance increased by $2.8 million during the three months ended June 30, 2024, which was primarily driven by new loan originations as well as a more adverse outlook on our office portfolio. The increase was partially offset by the favorable impacts of portfolio seasoning.

Current wording

Our General CECL Allowance increased by $4.0 million during the three months ended March 31, 2025, primarily driven by a more adverse macroeconomic outlook as well as loan originations. The increase was partially offset by the favorable impacts of portfolio seasoning. Comparatively, our General CECL Allowance decreased by $1.3 million during the three months ended December 31, 2024, primarily driven by the favorable impacts of portfolio seasoning as well as earlier than expected loan repayments. The decrease was partially offset by the effects of loan originations.

Previous wording

Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional information related in our General CECL Allowance.

Current wording

Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional information related to our General CECL Allowance.

Previous wording

We use forward currency contracts to economically hedge net interest and principal repayments under our loans denominated in currencies other than USD. Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended September 30, 2024 and the three months ended June 30, 2024 were net gains of $0.6 million and $5.0 million, respectively. The change in net gain for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 was predominantly due to higher forward point estimates and losses on forward currency contracts related to our net interest hedges for the three months ended September 30, 2024 compared to the three months ended June 30, 2024.

Current wording

Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended March 31, 2025 and the three months ended December 31, 2024 were net gains of $1.6 million and $5.7 million, respectively. The net gain for the three months ended March 31, 2025 was lower than the net gain for three months ended December 31, 2024 predominantly due to higher forward point estimates for the three months ended March 31, 2025.

Previous wording

Gain (loss) on interest rate hedges

Current wording

Gain (loss) on interest rate hedging instruments

Previous wording

During the three months ended September 30, 2024, we recorded a net loss of $14.0 thousand on our interest rate caps compared to a net gain of $0.1 million recorded during the three months ended June 30, 2024. The net loss was primarily driven by unrealized losses attributable to a decline in fair value of our construction financing interest rate cap as it approached its October 1, 2024 original maturity. These unrealized losses were partially offset by realized gains, attributable to SOFR exceeding the interest rate cap's strike rate.

Current wording

During the three months ended March 31, 2025, we recorded a net loss of $42.0 thousand on our interest rate caps compared to a net gain of $0.1 million recorded during the three months ended December 31, 2024. The net loss was primarily driven by unrealized losses attributable to a decline in fair value of our construction financing interest rate cap as it approaches its October 1, 2025 maturity. These unrealized losses were partially offset by realized gains, attributable to SOFR exceeding the interest rate cap's strike rate during the three months ended March 31, 2025 and the three months ended December 31, 2024.

Previous wording

The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics for the nine months ended September 30, 2024 and 2023 ($ in thousands):

Current wording

The following table sets forth information regarding our condensed consolidated results of operations and certain key operating metrics for the three months ended March 31, 2025 and 2024 ($ in thousands):

Previous wording

Net interest income decreased by $38.7 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease in net interest income was primarily driven by a decrease in interest income from placing a first mortgage loan and subordinate loan collateralized by the same ultra-luxury residential-for-sale property in Manhattan on non-accrual status as of May 1, 2023 and placing the Massachusetts Healthcare Loan on non-accrual status as of July 1, 2024. Additionally, we modified two of our loans to convert from floating rate loans to fixed rate loans, which resulted in a decrease in net interest income earned during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Current wording

Net interest income decreased by $17.2 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease in net interest income was primarily driven by lower average index rates and a lower average loan balance during three months ended March 31, 2025 compared to the three months ended March 31, 2024. Additionally, during the second quarter of 2024 we modified two of our loans to convert from floating rate loans to fixed rate loans, which resulted in a decrease in net interest income earned during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" for additional detail.

Previous wording

Net income related to real estate owned increased by $0.8 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was a result of greater net income attributable to the D.C. Hotel during the nine months ended September 30, 2024 primarily due to catch-up depreciation recorded upon reclassification of the asset from held-for-sale to held-for-investment as of March 31, 2023. Additionally, the increase in net income related to real estate owned is a result of taking title to the Atlanta Hotel on March 31, 2023. Given the timing of title acquisition, there was no net income associated with the Atlanta Hotel during the first quarter of 2023. Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.

Current wording

Refer to "Note 5 – Real Estate Owned" for full discussion of operations related to real estate owned.

Previous wording

Management fees expense decreased by $1.0 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was primarily due to a decrease in stockholders' equity (as defined in the Management Agreement) as a result of increased Specific CECL Allowance and realized losses on investments recorded during the nine months ended September 30, 2024.

Current wording

Management fees expense decreased by $0.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was primarily due to lower Stockholders' Equity (as defined in the Management Agreement) during the three months ended March 31, 2025.

Previous wording

Reversal of valuation allowance, commercial mortgage loan held for sale and Net realized loss on investment

Current wording

Valuation allowance, commercial mortgage loan held for sale

Previous wording

Refer to "Note 4 – Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 5 – Real Estate Owned" for additional detail.

Current wording

Refer to "Note 4 - Commercial Mortgage Loans, Subordinate Loans and Other Lending Assets, Net" and "Note 3 – Fair Value Disclosure" for additional detail.

Previous wording

During the nine months ended September 30, 2024, we recorded a net increase in our Specific CECL Allowance of $149.5 million, related to two of our subordinate loans. During the three months ended March 31, 2024, we recorded a $142.0 million Specific CECL Allowance related to a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY, primarily attributable to a reduction in list pricing of remaining units and slower sales pace at the property. During the three months ended June 30, 2024, we recorded a Specific CECL Allowance of $7.5 million on a subordinate loan secured by our interest in a Class A office building in Troy, MI, attributable to low occupancy and limited leasing activity in the property's submarket. Additionally, we recorded an increase and subsequent write-off of $127.5 million of our Specific CECL Allowance related to the Massachusetts Healthcare Loan. The $127.5 million write-off was recorded as a realized loss within net realized loss on investments in our September 30, 2024 condensed consolidated statement of operations.

Current wording

During the three months ended March 31, 2025, there was no change in our Specific CECL Allowance. Comparatively, during the three months ended March 31, 2024, we recorded a $142.0 million Specific CECL Allowance related to a mezzanine loan secured by an ultra-luxury residential property in Manhattan, NY, primarily attributable to a reduction in list pricing of remaining units and slower sales pace at the property.

Previous wording

For the nine months ended September 30, 2024, we recorded a net increase in our General CECL Allowance of $7.5 million. The increase was primarily driven by new loan originations as well as a more adverse macroeconomic outlook on our office portfolio. The increase was partially offset by the favorable impacts of portfolio seasoning.

Current wording

During the three months ended March 31, 2025, we recorded a net increase in our General CECL Allowance of $4.0 million. The increase was primarily driven by a more adverse macroeconomic outlook as well as the effects of loan originations. The increase was partially offset by the favorable impacts of portfolio seasoning.

Previous wording

Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the nine months ended September 30, 2024 and nine months ended September 30, 2023 was a net gain of $9.4 million and $4.3 million, respectively.

Current wording

Foreign currency gains and losses on derivative instruments are evaluated on a combined basis and the net impact for the three months ended March 31, 2025 and three months ended March 31, 2024 was a net gain of $1.6 million and $3.8 million, respectively. The net gain for the three months ended March 31, 2025 was lower than the net gain for three months ended March 31, 2024 predominantly due to higher forward point estimates for the three months ended March 31, 2025.

Previous wording

During the nine months ended September 30, 2024, we recorded a net gain of $0.4 million on our interest rate hedges or caps. The net gain was primarily driven by a $1.6 million realized gain recorded in relation to our construction financing interest rate cap, which we purchased in September 2023. The realized gain is attributable to SOFR exceeding the interest rate cap's strike rate. Additionally, we recorded a partially offsetting unrealized loss of $1.2 million, driven by a decrease in the interest rate cap's fair value, as it approaches its maturity.

Current wording

During the three months ended March 31, 2025, we recorded a net loss of $42.0 thousand on our interest rate caps. The net loss was primarily driven by unrealized losses attributable to a decline in fair value of our construction financing interest rate cap as it approaches its October 1, 2025 maturity. These unrealized losses were partially offset by realized gains, attributable to SOFR exceeding the interest rate cap’s strike rate.

Previous wording

Refer to "Note 11 – Derivatives" for full discussion of interest rate caps.

Current wording

Refer to "Note 10 – Derivatives" for further discussion of interest rate caps.

Previous wording

Distributable Earnings is defined as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on our foreign currency hedges, and (v) provision for loan losses. Distributable Earnings may also be adjusted to exclude certain other non-cash items, as determined by the Manager and approved by a majority of our independent directors.

Current wording

Distributable Earnings, a non-GAAP financial measure, is defined as net income available to common stockholders, computed in accordance with GAAP, adjusted for (i) equity-based compensation expense (a portion of which may become cash-based upon final vesting and settlement of awards should the holder elect net share settlement to satisfy income tax withholding), (ii) any unrealized gains or losses or other non-cash items (including depreciation and amortization related to real estate owned) included in net income available to common stockholders, (iii) unrealized income from unconsolidated joint ventures, (iv) foreign currency gains (losses), other than (a) realized gains/(losses) related to interest income, and (b) forward point gains/(losses) realized on our foreign currency hedges, and (v) provision for current expected credit losses. Distributable Earnings may also be adjusted to exclude certain other non-cash items, as determined by the Manager and approved by a majority of our independent directors.

Previous wording

A significant limitation associated with Distributable Earnings as a measure of our financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, our presentation of Distributable Earnings may not be comparable to similarly-titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as a substitute for our GAAP net income as a measure of our financial performance or any measure of our liquidity under GAAP. Distributable Earnings are reduced for realized losses on loans which include losses that management believes are near certain to be realized.

Current wording

A significant limitation associated with Distributable Earnings as a measure of our financial performance over any period is that it excludes unrealized gains (losses) from investments. In addition, our presentation of Distributable Earnings may not be comparable to similarly-titled measures of other companies, that use different calculations. As a result, Distributable Earnings should not be considered as a substitute for our GAAP net income as a measure of our financial performance or any measure of our liquidity under GAAP. Distributable Earnings are reduced for realized losses and increased for realized gains.

Previous wording

For the three and nine months ended September 30, 2024, our Distributable Earnings were ($83.2) million, or $(0.59) per share, and $16.6 million, or $0.12 per share, respectively, as compared to $52.7 million, or $0.37 per share, and $106.0 million, or $0.73 per share, respectively, for the same period in the prior year.

Current wording

For the three months ended March 31, 2025, our Distributable Earnings were $33.2 million, or $0.24 per share, as compared to $50.5 million, or $0.35 per share, respectively, for the same period in the prior year.

Previous wording

Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. There were no incremental shares included in the three and nine months ended September 30, 2024. For 2023, the weighted-average diluted shares for GAAP were determined using the if-converted method.

Current wording

Unvested RSUs are net of incremental shares assumed repurchased under the treasury stock method, if dilutive. There were 352,814 incremental shares included in 2025 and no incremental shares included in 2024.

Previous wording

As a REIT, U.S. federal income tax law generally requires us to distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons stockholders invest in a REIT, we generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors.

Current wording

As a REIT, U.S. federal income tax law generally requires us to distribute annually at least 90% of our REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains, and that we pay tax at regular corporate rates to the extent that we annually distribute less than 100% of our net taxable income. Given these requirements and our belief that dividends are generally one of the principal reasons stockholders invest in a REIT, we generally intend over time to pay dividends to our stockholders in an amount equal to our net taxable income, if and to the extent authorized by our board of directors. Distributable Earnings is a key factor considered by the board of directors in setting the dividend and as such we believe Distributable Earnings is useful to investors.

Previous wording

We believe it is useful to our investors to present Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.

Current wording

We believe it is useful to our investors to present Distributable Earnings prior to net realized loss on investments to reflect our operating results because (i) our operating results are primarily comprised of earning interest income on our investments net of borrowing and administrative costs, which comprise our ongoing operations and (ii) it has been a useful factor related to our dividend per share because it is one of the considerations when a dividend is determined. We believe that our investors use Distributable Earnings and Distributable Earnings prior to net realized loss on investments, or a comparable supplemental performance measure, to evaluate and compare the performance of our company and our peers.

Previous wording

The table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings and Distributable Earnings prior to net realized loss on investments and realized gain on extinguishment of debt ($ in thousands):

Current wording

There were no net realized losses on investments for the three months ended March 31, 2025 or the three months ended March 31, 2024. Accordingly, the table below summarizes the reconciliation from net income available to common stockholders to Distributable Earnings ($ in thousands):

Previous wording

We believe that presenting book value per share with sub-totals prior to the CECL Allowances and depreciation and amortization is useful for investors for various reasons, including, among other things, analyzing our compliance with financial covenants related to tangible net worth and debt-to-equity under our secured debt arrangements and senior secured term loan, which permit us to add the General CECL Allowance to our GAAP stockholders' equity. Given that our lenders consider book value per share prior to the General CECL Allowance as an important metric related to our debt covenants, we believe disclosing book value per share prior to the General CECL Allowance is important to investors such that they have the same visibility. We further believe that presenting book value before depreciation and amortization is useful to investors since it is a non-cash expense included in net income and is not representative of our core business and ongoing operations.

Current wording

We believe that presenting book value per share with sub-totals prior to the CECL Allowances and depreciation is useful for investors for various reasons, including, among other things, analyzing our compliance with financial covenants related to tangible net worth and debt-to-equity under our secured debt arrangements and senior secured term loan, which permit us to add the General CECL Allowance to our GAAP stockholders' equity. Given that our lenders consider book value per share prior to the General CECL Allowance as an important metric related to our debt covenants, we believe disclosing book value per share prior to the General CECL Allowance is important to investors such that they have the same visibility. We further believe that presenting book value before depreciation and amortization is useful to investors since it is a non-cash expense included in net income and is not representative of our core business and ongoing operations.

Previous wording

During the nine months ended September 30, 2024, we committed $1.1 billion of capital to new loans ($955.3 million was funded at closing), and provided $530.7 million of add-on fundings, including $212.9 million to a first mortgage loan secured by a portfolio of pubs across the United Kingdom, that was originated in December 2023. During the nine months ended September 30, 2024, we received $1.7 billion in loan repayments and sales.

Current wording

During the three months ended March 31, 2025, we committed $650.2 million of capital to new loans ($460.5 million was funded at closing), and provided $72.9 million of add-on fundings. During the three months ended March 31, 2025, we received $93.4 million in loan repayments and sales.

Previous wording

Gross of deferred financing costs of $10.9 million.

Current wording

Gross of deferred financing costs of $10.0 million.

Previous wording

The following table provides loan-by-loan details of our commercial mortgage loan portfolio and subordinate loan portfolio as of September 30, 2024 ($ in millions):

Current wording

The following table provides additional details of our commercial mortgage loans, subordinate loans, and other lending assets portfolio as of March 31, 2025 ($ in millions):

Previous wording

Our average asset and debt balances for the nine months ended September 30, 2024 were ($ in thousands):

Current wording

Our average asset and debt balances for the three months ended March 31, 2025 were ($ in thousands):

Previous wording

Our portfolio benefits from our core investment strategy whereby we target assets that are secured by institutional quality real estate throughout the United States and Europe. As discussed in Item 1. "Business—Investment Strategy" in our most recent Annual Report on Form 10-K, the Manager has implemented underwriting standards which place a particular emphasis on due diligence of prospective investments' sponsors and borrowers, as well as assessment of the risk/return profile and appropriate structure of each investment opportunity. As of September 30, 2024, our portfolio's weighted-average origination LTV ratio was 58%, excluding risk-rated five loans. This reflects significant equity value which we believe our loan sponsors would be committed to protect during periods of volatility and market disruption.

Current wording

Our portfolio benefits from our core investment strategy whereby we target assets that are secured by institutional quality real estate throughout the United States and Europe. As discussed in Item 1. "Business—Investment Strategy" in our most recent Annual Report on Form 10-K, the Manager has implemented underwriting standards which place a particular emphasis on due diligence of prospective investments' sponsors and borrowers, as well as assessment of the risk/return profile and appropriate structure of each investment opportunity. As of March 31, 2025, our portfolio's weighted-average origination LTV ratio was 57%, excluding risk-rated "5" loans. This reflects significant equity value which we believe our loan sponsors would be committed to protect during periods of volatility and market disruption.

Previous wording

$3.9 million of the General CECL Allowance for 2024 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

Current wording

$6.1 million of the General CECL Allowance for 2025 is excluded from this table because it relates to unfunded commitments and has been recorded as a liability under accounts payable, accrued expenses and other liabilities in our condensed consolidated balance sheets.

Previous wording

We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. In addition to our secured debt arrangements and senior secured term loan, we access additional sources of borrowings. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are subject to and carefully monitor the limits placed on us by our credit providers and those that assign ratings on our company.

Current wording

We use leverage for the sole purpose of financing our portfolio and not for the purpose of speculating on changes in interest rates. In addition to our secured debt arrangements, senior secured notes and senior secured term loan, we access additional sources of borrowings. Our charter and bylaws do not limit the amount of indebtedness we can incur; however, we are subject to and carefully monitor the limits placed on us by our credit providers and those that assign ratings on our company.

Previous wording

At September 30, 2024, our debt-to-equity ratio was 3.5 and our portfolio was comprised of $7.5 billion of commercial mortgage loans and $0.4 billion of subordinate loans. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.

Current wording

At March 31, 2025, our debt-to-equity ratio was 3.5 and our portfolio was comprised of $7.3 billion of commercial mortgage loans and $0.4 billion of subordinate loans. In order to achieve our return on equity, we generally finance our mortgage loans with 2.0 to 3.0 turns of leverage and generally do not finance our subordinate loan portfolio given built-in inherent structural leverage. Consequently, depending on our portfolio mix, our debt-to-equity ratio may exceed our previously disclosed thresholds.

Previous wording

Our current debt obligations consist of $1.3 billion, at face value, of corporate debt, $5.5 billion of asset specific financings, and $282.4 million of debt related to real estate owned. Our corporate debt includes $763.3 million of term loan borrowings and $500.0 million of senior secured notes. Our asset specific financings are generally tied to the underlying loans, and we anticipate repayments of $1.3 billion of secured debt arrangements in the short term. Specifics about our secured debt arrangements and corporate debt maturities and obligations are discussed below.

Current wording

Our current debt obligations consist of $1.3 billion, at face value, of corporate debt, $5.2 billion of secured debt arrangements, and $348.2 million of debt related to real estate owned, held for investment. Our corporate debt includes $759.3 million of term loan borrowings and $500.0 million of senior secured notes. Our secured debt arrangements are generally term-matched to the underlying loans and we anticipate repayments of $1.2 billion of secured debt arrangements in the short term. Specifics about our secured debt arrangements and corporate debt maturities and obligations are discussed below.

Previous wording

In addition to our debt obligations, as of September 30, 2024, we had $503.9 million of unfunded loan commitments. We expect that approximately $440.7 million will be funded to existing borrowers in the short term.

Current wording

In addition to our debt obligations, as of March 31, 2025, we had $989.2 million of unfunded loan commitments. We expect that approximately $592.9 million will be funded to existing borrowers in the short term.

Previous wording

As of September 30, 2024, we had $194.3 million of cash on hand, $105.8 million of loan proceeds held by servicer and held approximately $375.1 million of unencumbered assets. We also had $2.0 billion of undrawn capacity under our Secured Debt Arrangements and $179.7 million of additional capacity on our construction financing secured by our Brooklyn Development property which is available to fund future construction costs.

Current wording

As of March 31, 2025, we had $166.4 million of cash on hand, $3.8 million of loan proceeds held by servicer and held approximately $444.3 million of unencumbered assets. We also had $47.5 million of available borrowings under our financing arrangements based on existing collateral and $114.0 million of additional capacity on our construction financing secured by our Brooklyn Multifamily Development property which is available to fund future construction costs.