TPG RE Finance Trust Inc

Previous wording

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global, alternative asset management firm, founded in San Francisco in 1992, with $222 billion of assets under management (as of December 31, 2023) and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's real estate investment group and TPG’s executive committee.

Current wording

We are externally managed by our Manager, TPG RE Finance Trust Management, L.P., an affiliate of TPG. TPG is a leading global, alternative asset management firm, founded in San Francisco in 1992, with $223.6 billion of assets under management (as of March 31, 2024) and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions. Our Manager manages our investments and our day-to-day business and affairs in conformity with our investment guidelines and other policies that are approved and monitored by our board of directors. Our Manager is responsible for, among other matters, the selection, origination or purchase and sale of our portfolio investments, our financing activities and providing us with investment advisory services. Our Manager is also responsible for our day-to-day operations and performs (or causes to be performed) such services and activities relating to our investments and business and affairs as may be appropriate. Our investment decisions are approved by an investment committee of our Manager that is comprised of senior investment professionals of TPG, including senior investment professionals of TPG's real estate investment group and TPG’s management committee.

Previous wording

•Recognized Net income attributable to common stockholders of $13.1 million, compared to $2.6 million for the three months ended December 31, 2023, an increase of $10.4 million.

Current wording

•Recognized Net income attributable to common stockholders of $21.0 million, compared to $13.1 million for the three months ended March 31, 2024, an increase of $8.0 million.

Previous wording

•Produced Net interest income of $26.8 million, resulting from interest income of $82.2 million and interest expense of $55.4 million. Net interest income increased $5.5 million compared to the three months ended December 31, 2023.

Current wording

•Produced Net interest income of $27.5 million, resulting from interest income of $78.1 million and interest expense of $50.6 million. Net interest income increased $0.7 million compared to the three months ended March 31, 2024.

Previous wording

•Recorded an increase to our allowance for credit losses on our loan portfolio of $4.4 million, for a total allowance for credit losses of $74.1 million, or 210 basis points of total loan commitments of $3.5 billion.

Current wording

•Recorded a decrease to our allowance for credit losses on our loan portfolio of $4.5 million, for a total allowance for credit losses of $69.6 million, or 208 basis points of total loan commitments of $3.3 billion.

Previous wording

•Funded $10.7 million in future funding obligations associated with existing loans.

Current wording

•Funded $18.1 million in future funding obligations associated with existing loans.

Previous wording

•Received five full loan repayments of $211.3 million, partial principal payments of $15.3 million related to two loans and PIK repayments of $1.2 million related to one loan for total loan repayments of $227.8 million.

Current wording

•Received three full loan repayments of $162.5 million and partial principal payments of $23.7 million related to three loans, for total loan repayments of $186.1 million.

Previous wording

•Utilized the reinvestment feature in TRTX 2022-FL5 thirteen times, recycling loan repayments of $204.2 million.

Current wording

•Utilized the reinvestment feature in TRTX 2022-FL5 one time, recycling loan repayments of $51.0 million.

Previous wording

Available near-term liquidity as of March 31, 2024 of $370.7 million was comprised of:

Current wording

•Available near-term liquidity as of June 30, 2024 of $389.4 million was comprised of:

Previous wording

•$203.1 million of cash-on-hand, of which $188.1 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

Current wording

•$259.2 million of cash-on-hand, of which $244.2 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

Previous wording

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $111.9 million under secured credit agreements with five lenders, and $4.8 million under other financing arrangements.

Current wording

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $127.7 million under secured credit agreements with four lenders, and $2.4 million under other financing arrangements.

Previous wording

We have financed our loan investments as of March 31, 2024 utilizing three CRE CLOs totaling $1.9 billion, $602.1 million under secured credit agreements with total commitments of $2.2 billion provided by five lenders, $132.6 million under asset-specific financing arrangements, and $19.7 million under our $290.0 million secured revolving credit facility. As of March 31, 2024, 71.4% of our borrowings were pursuant to our CRE CLO vehicles, 23.6% were pursuant to our secured credit agreements and secured revolving credit facility and 5.0% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 77.1% of total loan portfolio borrowings as of March 31, 2024.

Current wording

We have financed our loan investments as of June 30, 2024 utilizing three CRE CLOs totaling $1.8 billion, $531.1 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, and $132.6 million under asset-specific financing arrangements. As of June 30, 2024, 73.4% of our borrowings were pursuant to our CRE CLO vehicles, 21.3% were pursuant to our secured credit agreements and secured revolving credit facility and 5.3% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 78.7% of total loan portfolio borrowings as of June 30, 2024.

Previous wording

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of March 31, 2024, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.88% (1.88% for arrangements with mark-to-market provisions and 2.00% for one arrangement with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 2.8 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

Current wording

Our ability to draw on our secured credit agreements and secured revolving credit facility is dependent upon our lenders’ willingness to accept as collateral loan investments we pledge to them to secure additional borrowings. These financing arrangements have credit spreads based upon the LTV and other risk characteristics of collateral pledged, and provide financing with mark-to-market provisions limited to collateral-specific events (i.e., "credit" marks). Borrowings under our secured revolving credit agreement are permitted with respect to collateral that satisfies pre-determined eligibility standards, and have a pre-determined advance rate (generally, 75% of the unpaid principal balance pledged) and credit spread (Term SOFR plus 2.00%). As of June 30, 2024, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.93% (1.93% for arrangements with mark-to-market provisions and 2.00% for one arrangement with no mark-to-market provisions), and a weighted average term to extended maturity assuming exercise of all extension options and term-out provisions of 2.8 years. These financing arrangements are generally 25% recourse to Holdco, with the exception of the secured revolving credit facility that is 100% recourse to Holdco.

Previous wording

For the three months ended March 31, 2024, we recorded net income attributable to common stockholders of $0.17 per diluted common share, an increase of $0.14 per diluted common share from the three months ended December 31, 2023, of which $0.17 per diluted common share relates to a decrease quarter over quarter in our credit loss expense, which totaled $4.4 million during the first quarter of 2024 as compared to $17.3 million during the fourth quarter of 2023.

Current wording

For the three months ended June 30, 2024, we recorded net income attributable to common stockholders of $0.26 per diluted common share, an increase of $0.09 per diluted common share from the three months ended March 31, 2024, of which $0.11 per diluted common share relates to a decrease quarter over quarter in our credit loss expense, which was a $4.5 million benefit during the second quarter of 2024 as compared to $4.4 million expense during the first quarter of 2024.

Previous wording

Distributable Earnings (loss) per diluted common share was $0.30 for three months ended March 31, 2024, an increase of $2.35 per diluted common share from the three months ended December 31, 2023. The increase in Distributable Earnings (loss) per diluted common share was primarily due to a decrease in realized losses on loan sales and REO conversions of $2.37 per diluted common share.

Current wording

Distributable Earnings per diluted common share was $0.28 for three months ended June 30, 2024, a decrease of $0.02 per diluted common share from the three months ended March 31, 2024. The decrease in Distributable Earnings per diluted common share was primarily due to a decrease in total other revenue of $0.01 per diluted common share, an increase in expenses of $0.01 per diluted common share, and includes the impact of dilution from the exercise of the Warrants during the three months ended June 30, 2024.

Previous wording

Our book value per common share as of March 31, 2024 was $11.81, a decrease of $0.05 per common share from our book value per common share as of December 31, 2023 of $11.86, primarily due to an increase in credit loss expense during the three months ended March 31, 2024 of $4.4 million, or $0.06 per common share.

Current wording

Our book value per common share as of June 30, 2024 was $11.40, a decrease of $0.46 per common share from our book value per common share as of December 31, 2023 of $11.86, primarily due to the exercise of the Warrants during the six months ended June 30, 2024, which resulted in the issuance of 2,647,059 shares of our common stock, diluting our book value by $0.39 per common share.

Previous wording

Our interest-earning assets are comprised entirely of a portfolio of floating rate, first mortgage loans, or in limited instances, contiguous mezzanine loans. As of March 31, 2024, our loans held for investment portfolio consisted of 51 first mortgage loans (or interests therein) totaling $3.5 billion of commitments with an unpaid principal balance of $3.4 billion. As of March 31, 2024, 100% of the loan commitments in our portfolio consisted of floating rate loans, of which 100.0% were first mortgage loans or, in one instance, a first mortgage loan and contiguous mezzanine loan both owned by us. As of March 31, 2024, we had $163.8 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

Current wording

Our interest-earning assets are comprised of a portfolio of primarily floating rate, first mortgage loans, or in limited instances, contiguous mezzanine loans. As of June 30, 2024, our loans held for investment portfolio consisted of 48 first mortgage loans (or interests therein) totaling $3.3 billion of commitments with an unpaid principal balance of $3.2 billion. As of June 30, 2024, 99.7% of the loan commitments in our portfolio consisted of floating rate loans, of which 100% were first mortgage loans or, in two instances, a first mortgage loan and contiguous mezzanine loan both owned by us. As of June 30, 2024, we had $139.6 million of unfunded loan commitments, our funding of which is subject to borrower satisfaction of certain milestones.

Previous wording

We may hold REO as a result of taking title to a loan's collateral. As of March 31, 2024, we owned four office properties and one multifamily property with an aggregate carrying value of $192.4 million.

Current wording

We may hold REO as a result of taking title to a loan's collateral. As of June 30, 2024, we owned four office properties and one multifamily property with an aggregate carrying value of $190.4 million.

Previous wording

During the three months ended March 31, 2024, we originated three mortgage loans with total commitments of $116.3 million, an initial unpaid principal balance of $107.0 million, and unfunded commitments at closing of $9.3 million. Loan fundings included $10.7 million of deferred future fundings related to previously originated loans. We received proceeds from five loan repayments in-full of $211.3 million, and principal amortization and accrued PIK interest payments of $16.5 million across three loans, for total loan repayments of $227.8 million during the period.

Current wording

During the three months ended June 30, 2024, we funded $18.1 million of deferred future fundings related to previously originated loans. We received proceeds from three loan repayments in-full of $162.5 million, and principal amortization of $23.7 million across three loans, for total loan repayments of $186.1 million during the period.

Previous wording

For the three months ended March 31, 2024, we generated interest income of $82.2 million and incurred interest expense of $55.4 million, which resulted in net interest income of $26.8 million.

Current wording

For the three months ended June 30, 2024, we generated interest income of $78.1 million and incurred interest expense of $50.6 million, which resulted in net interest income of $27.5 million.

Previous wording

(1)In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, we retain on our balance sheet a mezzanine loan. Total loan exposure encompasses the entire loan portfolio we originated, acquired and financed. We did not have any non-consolidated senior interests as of March 31, 2024.

Current wording

(1)In certain instances, we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party. In either case, the senior mortgage loan (i.e., the non-consolidated senior interest) is not included on our balance sheet. When we create structural leverage through the co-origination or non-recourse syndication of a senior loan interest to a third-party, we retain on our balance sheet a mezzanine loan. Total loan exposure encompasses the entire loan portfolio we originated, acquired and financed. We did not have any non-consolidated senior interests as of June 30, 2024. As of June 30, 2024, total loan exposure includes one fixed rate contiguous mezzanine loan.

Previous wording

(2)Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by our borrowers and to finance operating deficits during renovation and lease-up.

Current wording

(3)Unfunded loan commitments may be funded over the term of each loan, subject in certain cases to an expiration date or a force-funding date, primarily to finance property improvements or lease-related expenditures by our borrowers and to finance operating deficits during renovation and lease-up.

Previous wording

(3)As of March 31, 2024, all of our loans were indexed to Term SOFR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount, and accrual of both extension and exit fees. All-in yield for the total portfolio assumes Term SOFR as of March 31, 2024 for weighted average calculations.

Current wording

(4)As of June 30, 2024, all of our floating rate loans were indexed to Term SOFR. In addition to credit spread, all-in yield includes the amortization of deferred origination fees, purchase price premium and discount, and accrual of both extension and exit fees. All-in yield for the total portfolio assumes Term SOFR as of June 30, 2024 for weighted average calculations.

Previous wording

(4)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. As of March 31, 2024, based on the unpaid principal balance of our total loan exposure, 11.1% of our loans were subject to yield maintenance or other prepayment restrictions and 88.9% were open to repayment without penalty.

Current wording

(5)Extended maturity assumes all extension options are exercised by the borrower; provided, however, that our loans may be repaid prior to such date. As of June 30, 2024, based on the unpaid principal balance of our total loan exposure, 7.1% of our loans were subject to yield maintenance or other prepayment restrictions and 92.9% were open to repayment without penalty.

Previous wording

(5)Except for construction loans, LTV is calculated for loan originations and existing loans as the total outstanding principal balance of the loan or participation interest in a loan (plus any financing that is pari passu with or senior to such loan or participation interest) as of March 31, 2024, divided by the as-is appraised value of our collateral at the time of origination or acquisition of such loan or participation interest. For construction loans only, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value of the real estate securing the loan. The as-is or as-stabilized (as applicable) value reflects our Manager’s estimates, at the time of origination or acquisition of the loan or participation interest in a loan, of the real estate value underlying such loan or participation interest determined in accordance with our Manager’s underwriting standards and consistent with third-party appraisals obtained by our Manager.

Current wording

(6)Except for construction loans, LTV is calculated for loan originations and existing loans as the total outstanding principal balance of the loan or participation interest in a loan (plus any financing that is pari passu with or senior to such loan or participation interest) as of June 30, 2024, divided by the as-is appraised value of our collateral at the time of origination or acquisition of such loan or participation interest. For construction loans only, LTV is calculated as the total commitment amount of the loan divided by the as-stabilized value of the real estate securing the loan. The as-is or as-stabilized (as applicable) value reflects our Manager’s estimates, at the time of origination or acquisition of the loan or participation interest in a loan, of the real estate value underlying such loan or participation interest determined in accordance with our Manager’s underwriting standards and consistent with third-party appraisals obtained by our Manager.

Previous wording

As of March 31, 2024, we owned four office properties and one multifamily property, each of which previously served as collateral for first mortgage loans. We did not acquire or sell any REO properties during the three months ended March 31, 2024.

Current wording

As of June 30, 2024, we owned four office properties and one multifamily property, each of which previously served as collateral for first mortgage loans. We did not acquire or sell any REO properties during the three and six months ended June 30, 2024.

Previous wording

Our allowance for credit losses is influenced by the size and weighted average maturity date of our loans, loan quality, risk rating, delinquency status, loan-to-value ratio, historical loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. During the three months ended March 31, 2024, we recorded an increase of $4.4 million in our allowance for credit losses resulting in an aggregate CECL reserve of $74.1 million at quarter-end. This increase was primarily attributable to an increase in the general reserve which includes macroeconomic assumptions that reflect ongoing concerns about growing geopolitical tensions, the potential impact of market volatility, the possibility of an economic recession, limited liquidity in the capital markets, distress in the banking sector and a slowdown in investment sales, and loan specific property-level performance trends such as shifting office market fundamentals and inflationary pressures that may cause operating margins to narrow.

Current wording

Our allowance for credit losses is influenced by the size and weighted average maturity date of our loans, loan quality, risk rating, delinquency status, loan-to-value ratio, historical loss experience and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. During the three and six months ended June 30, 2024, we recorded a decrease of $4.5 million and $0.2 million, respectively, in our allowance for credit losses resulting in an aggregate CECL reserve of $69.6 million at quarter-end. This decrease was primarily attributable to improved asset level performance and a decrease in the general reserve which includes macroeconomic assumptions that reflect ongoing concerns about growing geopolitical tensions, the potential impact of market volatility, the possibility of an economic recession, limited liquidity in the capital markets, distress in the banking sector and a slowdown in investment sales, and loan specific property-level performance trends such as shifting office market fundamentals and inflationary pressures that may cause operating margins to narrow.

Previous wording

As of March 31, 2024, non-mark-to-market financing sources accounted for 77.1% of our total loan portfolio borrowings. The remaining 22.9% of our loan portfolio borrowings, comprised primarily of our five secured credit agreements, are subject to credit marks only. As of March 31, 2024, we did not have any non-consolidated senior interests.

Current wording

As of June 30, 2024, non-mark-to-market financing sources accounted for 78.7% of our total loan portfolio borrowings. The remaining 21.3% of our loan portfolio borrowings, comprised primarily of our four secured credit agreements, are subject to credit marks only. As of June 30, 2024, we did not have any non-consolidated senior interests.

Previous wording

As of March 31, 2024, aggregate borrowings outstanding under our secured credit agreements totaled $0.6 billion. As of March 31, 2024, the overall weighted average interest rate was the benchmark interest rate plus 1.88% per annum and the overall weighted average advance rate was 78.1%. As of March 31, 2024, outstanding borrowings under these arrangements had a weighted average term to extended maturity of 2.8 years assuming the exercise of all extension options and term out provisions. These secured credit agreements are generally 25.0% recourse to Holdco.

Current wording

As of June 30, 2024, aggregate borrowings outstanding under our secured credit agreements totaled $0.5 billion. As of June 30, 2024, the overall weighted average interest rate was the benchmark interest rate plus 1.93% per annum and the overall weighted average advance rate was 77.4%. As of June 30, 2024, outstanding borrowings under these arrangements had a weighted average term to extended maturity of 2.8 years assuming the exercise of all extension options and term out provisions. These secured credit agreements are generally 25.0% recourse to Holdco.

Previous wording

Each of the recourse secured credit agreements have “margin maintenance” provisions, which are designed to allow the lender to maintain a certain margin of credit enhancement against the assets which serve as collateral. The lender’s margin amount is typically based on a percentage of the market value of the asset and/or mortgaged property collateral; however, certain secured credit agreements may also involve margin maintenance based on maintenance of a minimum debt yield with respect to the cash flow from the underlying real estate collateral. In certain cases, margin maintenance provisions can relate to minimum debt yields for pledged collateral considered as a whole, or limits on concentration of loan exposure measured by property type or loan type.

Current wording

Each of the secured credit agreements have “margin maintenance” provisions, which are designed to allow the lender to maintain a certain margin of credit enhancement against the assets which serve as collateral. The lender’s margin amount is typically based on a percentage of the market value of the asset and/or mortgaged property collateral; however, certain secured credit agreements may also involve margin maintenance based on maintenance of a minimum debt yield with respect to the cash flow from the underlying real estate collateral. In certain cases, margin maintenance provisions can relate to minimum debt yields for pledged collateral considered as a whole, or limits on concentration of loan exposure measured by property type or loan type.

Previous wording

As of March 31, 2024, the weighted average haircut (which is equal to one minus the advance rate percentage against collateral for our secured credit agreements taken as a whole) was 21.9% compared to 22.3% as of December 31, 2023.

Current wording

As of June 30, 2024, the weighted average haircut (which is equal to one minus the advance rate percentage against collateral for our secured credit agreements taken as a whole) was 22.6% compared to 22.3% as of December 31, 2023.

Previous wording

On February 22, 2022, we closed a $250.0 million secured revolving credit facility with a syndicate of five banks to provide interim funding of up to 180 days for newly originated and existing loans. During the fourth quarter of 2022, an additional lender was added to the facility, increasing the borrowing capacity to $290.0 million. This facility has an initial term of three years, an interest rate of Term SOFR plus 2.00% that is payable monthly in arrears, and an unused fee of 15 or 20 basis points, depending upon whether utilization exceeds 50.0%. During the three months ended March 31, 2024, the weighted average unused fee was 20 basis points. This facility is 100% recourse to Holdco. As of March 31, 2024, we pledged one loan investment with a collateral principal balance of $31.9 million and had outstanding Term SOFR-based borrowings of $19.7 million.

Current wording

On February 22, 2022, we closed a $250.0 million secured revolving credit facility with a syndicate of five banks to provide interim funding of up to 180 days for newly originated and existing loans. During the fourth quarter of 2022, an additional lender was added to the facility, increasing the borrowing capacity to $290.0 million. This facility has an initial term of three years, an interest rate of Term SOFR plus 2.00% that is payable monthly in arrears, and an unused fee of 15 or 20 basis points, depending upon whether utilization exceeds 50.0%. During the three and six months ended June 30, 2024, the weighted average unused fee was 20 and 20 basis points, respectively. This facility is 100% recourse to Holdco. As of June 30, 2024, we did not have any outstanding borrowings under our secured revolving credit facility.

Previous wording

(1)Net of $1.1 million unamortized deferred financing costs.

Current wording

(1)Net of $0.9 million unamortized deferred financing costs.

Previous wording

As of March 31, 2024, we had three collateralized loan obligations, TRTX 2022-FL5, TRTX 2021-FL4, and TRTX 2019-FL3, totaling $1.9 billion, financing $2.5 billion, or 72.6%, of our loans held for investment portfolio, and holding $51.0 million of cash for investment in eligible loan collateral. As of March 31, 2024, our CRE CLOs provide low cost, non-mark-to-market, non-recourse financing for 71.4% of our loan portfolio borrowings. The collateralized loan obligations bear a weighted average interest rate of Term SOFR plus 1.96%, have a weighted average advance rate of 79.0%, and include a reinvestment feature that allows us to contribute existing or new loan investments in exchange for proceeds from loan repayments held by the CRE CLOs.

Current wording

As of June 30, 2024, we had three collateralized loan obligations, TRTX 2022-FL5, TRTX 2021-FL4, and TRTX 2019-FL3, totaling $1.8 billion, financing $2.4 billion, or 75.0%, of our loans held for investment portfolio. As of June 30, 2024, our CRE CLOs provide low cost, non-mark-to-market, non-recourse financing for 73.4% of our loan portfolio borrowings. The collateralized loan obligations bear a weighted average interest rate of Term SOFR plus 1.97%, and have a weighted average advance rate of 78.9%. Each CRE CLO included a reinvestment feature that allowed us to contribute existing or new loan investments in exchange for proceeds from loan repayments held by the CRE CLOs. The last of these reinvestment windows closed in February 2024.

Previous wording

(3)Collateral loan investment assets of FL3, FL4 and FL5 represent 10.1%, 30.6% and 31.9% of the aggregate unpaid principal balance of our loans held for investment portfolio as of March 31, 2024.

Current wording

(3)Collateral loan investment assets of FL3, FL4 and FL5 represent 9.9%, 31.8% and 33.3% of the aggregate unpaid principal balance of our loans held for investment portfolio as of June 30, 2024.

Previous wording

(4)During the three months ended March 31, 2024, we recognized interest expense of $36.2 million, which includes $1.4 million of deferred financing cost amortization.

Current wording

(4)During the three months ended June 30, 2024, we recognized interest expense of $35.7 million, which includes $1.5 million of deferred financing cost amortization. During the six months ended June 30, 2024, we recognized interest expense of $71.9 million, which includes $2.9 million of deferred financing cost amortization.

Previous wording

During the three months ended March 31, 2024, we utilized our eligible reinvestment feature related to TRTX 2022-FL5 thirteen times, recycling $204.2 million of principal repayments received. The reinvestment period for TRTX 2019-FL3 ended on October 11, 2021. The reinvestment period for TRTX 2021-FL4 ended on March 11, 2023. The reinvestment period for TRTX 2022-FL5 ended on February 9, 2024. In accordance with the TRTX 2022-FL5 indenture, prior to the end of the reinvestment period on February 9, 2024, we committed to contribute certain assets and completed the contribution process on April 12, 2024.

Current wording

During the six months ended June 30, 2024, we utilized our eligible reinvestment feature related to TRTX 2022-FL5 14 times, recycling $255.2 million of principal repayments received. The reinvestment period for TRTX 2019-FL3 ended on October 11, 2021. The reinvestment period for TRTX 2021-FL4 ended on March 11, 2023. The reinvestment period for TRTX 2022-FL5 ended on February 9, 2024. In accordance with the TRTX 2022-FL5 indenture, prior to the end of the reinvestment period on February 9, 2024, we committed to contribute certain assets and completed the contribution process on April 12, 2024.

Previous wording

Our business model seeks to minimize our exposure to changing interest rates by match-indexing our assets using the same, or similar, benchmark indices. Accordingly, rising interest rates will generally increase our net interest income, while declining interest rates will generally decrease our net interest income, subject to the impact of interest rate floors in our mortgage loan investment portfolio. As of March 31, 2024, 100.0% of our loan investments by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates, which resulted in $0.7 billion of net floating rate exposure, subject to the impact of interest rate floors on all our floating rate loans and less than 0.8% of our liabilities. Subject to the specific footnote disclosures in the preceding tables describing our revolving credit facilities, secured financing arrangements, asset-specific financing arrangements and CRE CLOs, and the table that follows, our liabilities are generally index-matched to each loan investment asset, resulting in a net exposure to movements in floating benchmark interest rates that varies based on the relative proportion of floating rate assets and liabilities.

Current wording

Our business model seeks to minimize our exposure to changing interest rates by match-indexing our assets using the same, or similar, benchmark indices. Accordingly, rising interest rates will generally increase our net interest income, while declining interest rates will generally decrease our net interest income, subject to the impact of interest rate floors in our mortgage loan investment portfolio. As of June 30, 2024, 99.8% of our loan investments by unpaid principal balance earned a floating rate of interest and were financed with liabilities that require interest payments based on floating rates, which resulted in $0.7 billion of net floating rate exposure, subject to the impact of interest rate floors on all our floating rate loans and less than 0.9% of our liabilities. Subject to the specific footnote disclosures in the preceding tables describing our revolving credit facilities, secured financing arrangements, asset-specific financing arrangements and CRE CLOs, and the table that follows, our liabilities are generally index-matched to each loan investment asset, resulting in a net exposure to movements in floating benchmark interest rates that varies based on the relative proportion of floating rate assets and liabilities.

Previous wording

(2)Additional information regarding our consolidated results of operations and financial performance for the three months ended December 31, 2023 can be found in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 20, 2024.

Current wording

(2)Additional information regarding our consolidated results of operations and financial performance for the three months ended March 31, 2024 can be found in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 filed with the SEC on April 30, 2024.

Previous wording

Net interest income increased by $5.5 million to $26.8 million during the three months ended March 31, 2024 compared to $21.3 million for the three months ended December 31, 2023. The increase was primarily due to repayments on our secured financing arrangements during the first quarter of $384.1 million and interest savings during the first quarter from repayments on our secured financing arrangement related to full loan repayments, loan sales and REO conversions during the fourth quarter.

Current wording

Net interest income increased by $0.7 million to $27.5 million during the three months ended June 30, 2024 compared to $26.8 million for the three months ended March 31, 2024. The increase was primarily due to repayments on our secured financing arrangements during the second quarter of $136.0 million and interest savings during the second quarter from repayments on our secured financing arrangement related to full loan repayments during the first quarter.

Previous wording

Other revenue increased $1.9 million for the three months ended March 31, 2024 compared to the three months ended December 31, 2023, primarily due to revenue from real estate owned operations related to a full quarter of operations related to three office properties and one multifamily property acquired during December 2023. This increase was partially offset by a decrease in other income, net primarily attributable to a decrease in interest earned on lower cash balances during the period as we deployed our reinvestment cash.

Current wording

Other revenue decreased $0.3 million for the three months ended June 30, 2024 compared to the three months ended March 31, 2024, primarily due to a decrease in other income, net primarily attributable to a decrease in interest earned on lower cash balances during the period as we deployed our reinvestment cash.