TPG RE Finance Trust Inc

Previous wording

We continue to evaluate the effects of macroeconomic concerns, including, without limitation: a period of sustained high interest rates; indications that short-term interest rates may decline; inflation; structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe; geopolitical tensions; concerns of an economic recession in the near term; and changes to the way commercial tenants use real estate, specifically office buildings. Rising interest rates, structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe, increased volatility in debt and equity markets, declines in commercial property values, and elevated geopolitical risk led us to continue to curtail our loan origination volume and maintain high levels of liquidity during 2023 and continuing through 2024. From January 1, 2024 through September 30, 2024, we originated six first mortgage transitional loans, with total commitments of $320.3 million, an initial unpaid principal balance of $306.8 million, and unfunded commitments at closing of $13.5 million.

Current wording

We continue to evaluate the effects of macroeconomic conditions, including, without limitation: a period of sustained high interest rates; the potential impact of tariffs; inflation; structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe; geopolitical tensions; concerns of an economic recession in the near term; and changes to the way commercial tenants use real estate, specifically office buildings. Rising interest rates, structural shifts and regulatory changes to the commercial banking systems of the U.S. and Western Europe, increased volatility in debt and equity markets, declines in commercial property values, and elevated geopolitical risk led us to continue to curtail our loan origination volume and maintain high levels of liquidity during 2024 and continuing through 2025.

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 $229.0 billion of assets under management (as of June 30, 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.

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 manager with $246 billion in assets under management as of December 31, 2024. TPG offers a broad range of investment strategies across the alternative asset management landscape, primarily in private equity, credit, and real estate. 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 $18.7 million, compared to $21.0 million for the three months ended June 30, 2024, a decrease of $2.3 million.

Current wording

•Recognized Net income attributable to common stockholders of $10.0 million, compared to $6.9 million for the three months ended December 31, 2024, an increase of $3.1 million.

Previous wording

•Produced Net interest income of $29.3 million, resulting from interest income of $77.9 million and interest expense of $48.6 million. Net interest income increased $1.8 million compared to the three months ended June 30, 2024.

Current wording

•Produced Net interest income of $24.9 million, resulting from interest income of $68.0 million and interest expense of $43.1 million. Net interest income increased $0.2 million compared to the three months ended December 31, 2024.

Previous wording

•Generated Distributable Earnings of $23.0 million, compared to $22.3 million for the three months ended June 30, 2024, an increase of $0.7 million.

Current wording

•Generated Distributable Earnings of $19.4 million, compared to $7.8 million for the three months ended December 31, 2024, an increase of $11.6 million.

Previous wording

•Recorded a decrease to our allowance for credit losses on our loan portfolio of $0.3 million, for a total allowance for credit losses of $69.3 million, or 205 basis points of total loan commitments of $3.4 billion.

Current wording

•Recorded an increase to our allowance for credit losses on our loan portfolio of $3.2 million, for a total allowance for credit losses of $67.2 million, or 199 basis points of total loan commitments of $3.4 billion.

Previous wording

•Funded $7.6 million in future funding obligations associated with existing loans.

Current wording

•Loan portfolio activity included $13.6 million of future funding obligations associated with existing loans and partial principal payments of $21.5 million related to two loans.

Previous wording

•Maintained substantial near-term liquidity of $357.0 million, as of September 30, 2024, comprised of:

Current wording

•Maintained substantial near-term liquidity of $457.6 million, as of March 31, 2025, comprised of:

Previous wording

•$226.3 million of cash-on-hand, of which $211.3 million was available for investment, net of $15.0 million held to satisfy liquidity covenants under our secured financing agreements.

Current wording

•$363.0 million of cash-on-hand, of which $348.0 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 $128.1 million under secured credit agreements with four lenders, and $2.6 million under other financing arrangements.

Current wording

•Undrawn capacity (liquidity available to us without the need to pledge additional collateral to our lenders) of $22.7 million under secured credit agreements with two lenders, and $2.7 million under other financing arrangements.

Previous wording

We have financed our loan investments as of September 30, 2024 utilizing three CRE CLOs totaling $1.7 billion, $498.6 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, and $204.3 million under asset-specific financing arrangements. As of September 30, 2024, 70.2% of our borrowings were pursuant to our CRE CLO vehicles, 21.5% were pursuant to our secured credit agreements and secured revolving credit facility and 8.3% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 79.7% of total loan portfolio borrowings as of September 30, 2024.

Current wording

We have financed our loan investments as of March 31, 2025 utilizing three CRE CLOs totaling $2.5 billion, $252.5 million under secured credit agreements with total commitments of $1.7 billion provided by four lenders, and $29.1 million under asset-specific financing arrangements. As of March 31, 2025, 89.9% of our borrowings were pursuant to our CRE CLO vehicles, 9.1% were pursuant to our secured credit agreements and secured revolving credit facility and 1.0% were pursuant to our asset-specific financing arrangements. Non-mark-to-market financing comprised 91.0% of total loan portfolio borrowings as of March 31, 2025.

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 September 30, 2024, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 1.96% (1.95% 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 2.5 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 March 31, 2025, borrowings under these secured credit agreements and secured revolving credit facility had a weighted average credit spread of 2.03% (2.03% 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 September 30, 2024, we recorded net income attributable to common stockholders of $0.23 per diluted common share, a decrease of $0.03 per diluted common share from the three months ended June 30, 2024, of which $0.05 per diluted common share relates to a decrease quarter over quarter in our credit loss benefit, which was a $0.3 million benefit during the third quarter of 2024 as compared to $4.5 million benefit during the second quarter of 2024. This decrease was partially offset by an increase in net interest income of $0.02 per diluted common share.

Current wording

For the three months ended March 31, 2025, we recorded net income attributable to common stockholders of $0.12 per diluted common share, an increase of $0.03 per diluted common share from the three months ended December 31, 2024, of which $0.04 per diluted common share relates to an increase in revenue from real estate owned operations primarily due to revenue earned from the sale of a historical tax credit during the first quarter of 2025.

Previous wording

Our book value per common share as of September 30, 2024 was $11.41, a decrease of $0.45 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 $0.38 per common share.

Current wording

Our book value per common share as of March 31, 2025 was $11.19, a decrease of $0.08 per common share from our book value per common share as of December 31, 2024 of $11.27, primarily due to an increase in credit loss expense during the three months ended March 31, 2025 of $3.4 million, or $0.04 per common share.

Previous wording

(1)Includes preferred stock dividends declared and paid for Series A Preferred Stock and Series C Preferred Stock shares outstanding for the three months ended September 30, 2024 and June 30, 2024.

Current wording

(1)Includes preferred stock dividends declared and paid on outstanding shares of Series A Preferred Stock and Series C Preferred Stock.

Previous wording

(2)Basic and diluted earnings per common share are computed independently based on the weighted average shares of common stock outstanding. Diluted earnings per common share includes the impact of participating securities outstanding. Prior to the May 8, 2024 Warrant exercise, diluted earnings per common share included any incremental shares that would be outstanding assuming the exercise of the Warrants.

Current wording

(2)Basic and diluted earnings per common share are computed independently based on the weighted average shares of common stock outstanding. Diluted earnings per common share includes the impact of participating securities outstanding.

Previous wording

Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss) attributable to our common stockholders, including realized gains and losses from loan write-offs, loan sales and other loan resolutions (including conversions to REO), regardless of whether such items are included in other comprehensive income or loss, or in GAAP net income (loss), and excluding (i) non-cash stock compensation expense, (ii) depreciation and amortization expense, (iii) unrealized gains (losses) (including credit loss expense (benefit), net), and (iv) certain non-cash or income and expense items. The exclusion of depreciation and amortization expense from the calculation of Distributable Earnings only applies to debt investments related to real estate to the extent we foreclose upon the property or properties underlying such debt investments.

Current wording

Distributable Earnings is a non-GAAP measure, which we define as GAAP net income (loss) attributable to our common stockholders, including realized gains and losses from loan write-offs, loan sales and other loan resolutions (including conversions to REO), regardless of whether such items are included in other comprehensive income or loss, or in GAAP net income (loss), and excluding (i) non-cash stock compensation expense, (ii) depreciation and amortization expense (which only applies to debt investments related to real estate to the extent we foreclose upon the property or properties underlying such debt investments), (iii) unrealized gains (losses) (including credit loss expense (benefit), net), and (iv) certain non-cash or income and expense items.

Previous wording

Distributable Earnings excludes the impact of our credit loss provision or reversals of our credit loss provision, but only to the extent that our credit loss provision exceeds any realized credit losses during the applicable reporting period.

Current wording

Distributable Earnings excludes the impact of our credit loss provision or reversals of our credit loss provision, but only to the extent that our credit loss provision exceeds any realized credit losses during the applicable reporting period. See Note 2 to our Consolidated Financial Statements included in this Form 10-Q for additional details regarding our accounting policies and estimation of our allowance for credit losses.

Previous 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 September 30, 2024, our loans held for investment portfolio consisted of 48 first mortgage loans (or interests therein) totaling $3.4 billion of commitments with an unpaid principal balance of $3.3 billion. As of September 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 September 30, 2024, we had $122.3 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 two instances, contiguous mezzanine loans. As of March 31, 2025, our loans held for investment portfolio consisted of 45 first mortgage loans (or interests therein) totaling $3.4 billion of commitments with an unpaid principal balance of $3.3 billion. As of March 31, 2025, 99.7% of the loan commitments in our portfolio consisted of floating rate loans, of which 100.0% were first mortgage loans. In two instances, a first mortgage loan and contiguous mezzanine loan are both owned by us. As of March 31, 2025, we had $109.8 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 September 30, 2024, we owned four office properties and one multifamily property with an aggregate carrying value of $188.5 million.

Current wording

We may hold REO as a result of taking title to a loan's collateral. As of March 31, 2025, we owned four office properties and four multifamily properties with an aggregate carrying value of $272.2 million.

Previous wording

During the three months ended September 30, 2024, we originated three mortgage loans with total commitments of $204.0 million, an initial unpaid principal balance of $199.8 million, and unfunded commitments at closing of $4.2 million. Loan fundings included $7.6 million of deferred future fundings related to previously originated loans. We received proceeds from three loan repayments in full of $141.1 million, and principal amortization of $8.2 million across one loan, for total loan repayments of $149.3 million during the period.

Current wording

During the three months ended March 31, 2025, loan fundings included $13.6 million of deferred future fundings related to previously originated loans. We received principal amortization of $21.5 million across two loans.

Previous wording

(1)Additional fundings made under existing loan commitments.

Current wording

(1)Additional fundings made under existing loan commitments. Includes accrued PIK interest of $0.2 million and $0.2 million as of March 31, 2025 and December 31, 2024, respectively.

Previous wording

For the three months ended September 30, 2024, we generated interest income of $77.9 million and incurred interest expense of $48.6 million, which resulted in net interest income of $29.3 million.

Current wording

For the three months ended March 31, 2025, we generated interest income of $68.0 million and incurred interest expense of $43.1 million, which resulted in net interest income of $24.9 million.

Previous wording

(2)Unpaid principal balance includes PIK interest of $0.2 million as of September 30, 2024.

Current wording

(2)Unpaid principal balance includes PIK interest of $0.5 million related to one loan as of March 31, 2025.

Previous 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 September 30, 2024, based on the unpaid principal balance of our total loan exposure, 16.6% of our loans were subject to yield maintenance or other prepayment restrictions and 83.4% 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 March 31, 2025, based on the unpaid principal balance of our total loan exposure, 23.6% of our loans were subject to yield maintenance or other prepayment restrictions and 76.4% were open to repayment without penalty.

Previous wording

(1)Excludes capitalized interest of $0.2 million.

Current wording

(1)Excludes capitalized interest of $0.5 million related to one loan.

Previous wording

As of September 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 nine months ended September 30, 2024.

Current wording

As of March 31, 2025, we owned four office properties and four multifamily properties, each of which previously served as collateral for first mortgage loans. During the three months ended March 31, 2025, we did not acquire or sell any REO properties.

Previous wording

We actively manage the assets in our portfolio from closing to final repayment or resolution. We are party to an agreement with Situs Asset Management, LLC (“SitusAMC”), one of the largest commercial mortgage loan servicers, pursuant to which SitusAMC provides us with dedicated asset management employees to provide asset management services pursuant to our proprietary guidelines. Following the closing of an investment, this dedicated asset management team rigorously monitors the investment under our Manager’s oversight, with an emphasis on ongoing financial, legal and quantitative analyses. Through the final repayment of an investment, the asset management team maintains regular contact with borrowers, servicers and local market experts monitoring performance of the collateral, anticipating borrower, property and market issues, and enforcing our rights and remedies when appropriate.

Current wording

We actively manage the assets in our portfolio from closing to final repayment or resolution. We are party to agreements with Situs Asset Management, LLC (“SitusAMC”), one of the largest commercial mortgage loan servicers, pursuant to which SitusAMC (i) provides us with dedicated asset management employees to provide asset management services pursuant to our proprietary guidelines and (ii) services our loans. Following the closing of an investment, the dedicated asset management team rigorously monitors the investment under our Manager’s oversight, with an emphasis on ongoing financial, legal and quantitative analyses. Through the final repayment of an investment, the asset management team maintains regular contact with borrowers, servicers and local market experts monitoring performance of the collateral, anticipating borrower, property and market issues, and enforcing our rights and remedies when appropriate. We manage our REO using resources of TPG Real Estate and third party property managers all under the direct supervision of our Manager.

Previous wording

During the three months ended September 30, 2024, as part of our quarterly risk rating process, we did not upgrade or downgrade any of our loans. During the three months ended September 30, 2024, we received repayment in full of three loans with a total unpaid principal balance of $141.1 million and a weighted average risk rating of 2.6 as of June 30, 2024. Of the three new loan investments made during the three months ended September 30, 2024, two loans were assigned an initial risk rating of "3" and the third loan was assigned an initial risk rating of "2".

Current wording

During the three months ended March 31, 2025, we did not upgrade or downgrade any of our loans as part of our quarterly risk rating process.

Previous wording

Loan modifications and amendments are commonplace in the transitional lending business. We may amend or modify a loan depending on the loan’s specific facts and circumstances. These loan modifications typically include additional time for the borrower to refinance or sell the collateral property, adjustment or waiver of performance tests that are prerequisite to the extension of a loan maturity, modification of terms of interest rate cap agreements, and/or deferral of scheduled principal payments. In exchange for a modification, we often receive a partial repayment of principal, a short-term accrual of PIK interest for a portion of interest due, a cash infusion to replenish interest or capital improvement reserves, termination of all or a portion of the remaining unfunded loan commitment, additional call protection, and/or an increase in the loan coupon or additional loan fees. We continue to work with our borrowers to address issues as they arise while seeking to preserve the credit attributes of our loans. However, we cannot assure you that these efforts will be successful, and we may experience payment delinquencies, defaults, foreclosures, or losses.

Current wording

Loan modifications and amendments are commonplace in the transitional lending business. We may amend or modify a loan depending on the loan’s specific facts and circumstances. These loan modifications typically include additional time for the borrower to refinance or sell the collateral property, adjustment or waiver of performance tests that are prerequisite to the extension of a loan maturity, modification of terms of interest rate cap agreements, and/or deferral of scheduled principal payments. In exchange for a modification, we often receive a partial repayment of principal, a short-term accrual of PIK interest for a portion of interest due, a cash infusion to replenish interest or capital improvement reserves, termination of all or a portion of the remaining unfunded loan commitment, additional call protection, and/or an increase in the loan coupon or additional loan fees. We work with our borrowers to address issues as they arise while seeking to preserve the positive credit attributes of our loans. However, we cannot assure you that these efforts will be successful, and we may experience payment delinquencies, defaults, foreclosures, or losses.

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 and nine months ended September 30, 2024, we recorded a decrease of $0.3 million and $0.5 million, respectively, in our allowance for credit losses resulting in an aggregate CECL reserve of $69.3 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 general level of interest rates and slope of the yield curve, the possibility of an economic recession, limited liquidity in the capital markets, structural shifts and regulatory changes 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 months ended March 31, 2025, we recorded an increase of $3.2 million in our allowance for credit losses resulting in an aggregate CECL reserve of $67.2 million at quarter-end. This increase was primarily attributable to an increase in the general reserve which reflects the impact of an uncertain macroeconomic environment and includes macroeconomic assumptions that include ongoing concerns about growing geopolitical tensions, the potential impact of market volatility and tariffs, the general level of interest rates and slope of the yield curve, the possibility of an economic recession, limited liquidity in the capital markets, structural shifts and regulatory changes 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 September 30, 2024, non-mark-to-market financing sources accounted for 79.7% of our total loan portfolio borrowings. The remaining 20.3% of our loan portfolio borrowings, comprised primarily of our four secured credit agreements, are subject to credit marks only. As of September 30, 2024, we did not have any non-consolidated senior interests.

Current wording

As of March 31, 2025, non-mark-to-market financing sources accounted for 91.0% of our total loan portfolio borrowings. The remaining 9.0% of our loan portfolio borrowings, comprised primarily of our four secured credit agreements, are subject to credit marks only. As of March 31, 2025, we did not have any non-consolidated senior interests.

Previous wording

As of September 30, 2024, aggregate borrowings outstanding under our secured credit agreements totaled $0.5 billion. As of September 30, 2024, the overall weighted average interest rate was the benchmark interest rate plus 1.95% per annum and the overall weighted average advance rate was 77.3%. As of September 30, 2024, outstanding borrowings under these arrangements had a weighted average term to extended maturity of 2.6 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 March 31, 2025, aggregate borrowings outstanding under our secured credit agreements totaled $0.3 billion. As of March 31, 2025, the overall weighted average interest rate was the benchmark interest rate plus 2.03% per annum and the overall weighted average advance rate was 77.6%. As of March 31, 2025, 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

(5)Our ability to extend our secured credit agreements to the dates shown above is subject to satisfaction of certain conditions. Even if extended, our lenders retain sole discretion to determine whether to accept pledged collateral, and the advance rate and credit spread applicable to each borrowing thereunder.

Current wording

(5)Our ability to extend our secured credit agreements to the dates shown above is subject to satisfaction of certain conditions. Even if extended, our lenders retain sole discretion during the revolving period to determine whether to accept pledged collateral, and the advance rate and credit spread applicable to each borrowing thereunder. No new loan collateral may be pledged to the Goldman Sachs facility after August 19, 2026, on which date the facility automatically converts to a two-year term facility.

Previous wording

For each transaction, we and the lender agree to a trade confirmation which sets forth, among other things, the asset purchase price, the maximum advance rate, the interest rate and the market value of the asset. For transactions under our secured credit agreements, the trade confirmation may also set forth any future funding obligations which are contemplated with respect to the specific transaction and/or the underlying loan asset and loan-specific margin maintenance provisions, described below.

Current wording

For transactions, we and the lender generally agree to a trade confirmation which sets forth, among other things, the asset purchase price, the maximum advance rate, the interest rate and the market value of the asset. For transactions under our secured credit agreements, the trade confirmation may also set forth any future funding obligations which are contemplated with respect to the specific transaction and/or the underlying loan asset and loan-specific margin maintenance provisions, described below.

Previous wording

Generally, our secured credit agreements allow for revolving balances, which allow us to voluntarily repay balances and draw again on existing available credit. The primary obligor on each secured credit agreement is a separate special purpose subsidiary of ours which is restricted from conducting activity other than activity related to the utilization of its secured credit agreement and the loans or loan interests that are originated or acquired by such subsidiary. As additional credit support, our holding company subsidiary, Holdco, provides certain guarantees of the obligations of its subsidiaries. Holdco’s liability is generally capped at 25% of the outstanding obligations of the special purpose subsidiary which is the primary obligor under the related agreement. However, this liability cap does not apply in the event of certain “bad boy” defaults which can trigger recourse to Holdco for losses or the entire outstanding obligations of the borrower depending on the nature of the “bad boy” default in question. Examples of such “bad boy” defaults include, without limitation, fraud, intentional misrepresentation, willful misconduct, incurrence of additional debt in violation of financing documents, and the filing of a voluntary or collusive involuntary bankruptcy or insolvency proceeding of the special purpose entity subsidiary or the guarantor entity.

Current wording

Generally, our secured credit agreements allow for revolving balances, which allow us to voluntarily repay balances and draw again on existing available credit. The primary obligor on each secured credit agreement is a separate special purpose subsidiary of ours which is restricted from conducting any activity other than that related to the utilization of its secured credit agreement and the loans or loan interests that are originated or acquired by such subsidiary. As additional credit support, our holding company subsidiary, Holdco, provides certain guarantees of the obligations of its subsidiaries. Holdco’s liability is generally capped at 25% of the outstanding obligations of the special purpose subsidiary which is the primary obligor under the related agreement. However, this liability cap does not apply in the event of certain “bad boy” defaults which can trigger recourse to Holdco for losses or the entire outstanding obligations of the borrower depending on the nature of the “bad boy” default in question. Examples of such “bad boy” defaults include, without limitation, fraud, intentional misrepresentation, willful misconduct, incurrence of additional debt in violation of financing documents, and the filing of a voluntary or collusive involuntary bankruptcy or insolvency proceeding of the special purpose entity subsidiary or the guarantor entity.

Previous wording

As of September 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 22.7% compared to 22.3% as of December 31, 2023.

Current wording

As of March 31, 2025, 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 22.4% compared to 22.4% as of December 31, 2024.

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 and nine months ended September 30, 2024, the weighted average unused fee was 20 and 20 basis points, respectively. This facility is 100% recourse to Holdco. As of September 30, 2024, we pledged one loan investment with a collateral principal balance of $41.3 million and had outstanding Term SOFR-based borrowings of $31.0 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. During the first quarter of 2025, we amended the facility to extend the maturity by three years and increased the borrowing capacity to $375.0 million with a syndicate of seven lenders. This facility has maturity of February 13, 2028, 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, 2025, the weighted average unused fee was 20 basis points. This facility is 100% recourse to Holdco. As of March 31, 2025, we did not have any outstanding borrowings under our secured revolving credit facility.

Previous wording

As of September 30, 2024, we had three separate asset-specific financing arrangements with three third-party lenders. On December 5, 2023, we closed a $90.6 million asset-specific financing facility (the "HSBC Facility"). During the third quarter of 2024, we increased the borrowings pursuant to the HSBC facility by $72.0 million to a total of $162.6 million, with the pledge of an additional loan. The HSBC Facility provides asset-specific financing on a non-mark-to-market basis with matched term. This facility is 20% recourse to Holdco. On November 17, 2022, we closed a $23.3 million asset-specific financing arrangement with Customers Bank. The arrangement provides non-mark-to-market matched term, non-recourse financing. On June 30, 2022, we closed a $200.0 million loan financing facility (the "BMO Facility"). The BMO Facility provides asset-specific financing on a non-mark-to-market basis with matched term. This facility is 25% recourse to Holdco.

Current wording

As of March 31, 2025, we had one asset-specific financing arrangement with one third-party lender (the "BMO Facility"). The BMO Facility provides asset-specific financing on a non-mark-to-market basis with matched term. This facility is 25% recourse to Holdco.

Previous wording

The following table details our asset-specific financing arrangements (dollars in thousands):

Current wording

The following table details our asset-specific financing arrangement (dollars in thousands):