8-K
TPG RE Finance Trust, Inc. (TRTX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 6, 2022
TPG RE FINANCE TRUST, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 001-38156 | 36-4796967 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br>Identification No.) |
888 Seventh Avenue, 35th Floor, New York, New York 10106
(Address of principal executive offices) (Zip code)
(212) 601-4700
Registrant’s telephone number, including area code
Not Applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, par value $0.001 Per Share | TRTX | New York Stock Exchange |
| 6.25% Series C Cumulative Redeemable Preferred Stock, par value $0.001 per share | TRTX PRC | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On January 6, 2022, TPG RE Finance Trust, Inc. (the “Company”) issued a press release (the “Press Release”) announcing its loan originations and certain details of its business activity for the quarter and full-year ended December 31, 2021. A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in Item 2.02 of this Current Report, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, unless it is specifically incorporated by reference therein.
| Item 7.01 | Regulation FD Disclosure. |
|---|
The information set forth under Item 2.02 above is incorporated by reference into this Item 7.01.
The furnishing of these materials is not intended to constitute a representation that such furnishing is required by Regulation FD or other securities laws, or that the Press Release includes material investor information that is not otherwise publicly available. In addition, the Company does not assume any obligation to update such information in the future.
| Item 9.01 | Financial Statements and Exhibits. |
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(d) Exhibits.
| Exhibit<br>No. | Description of Exhibit |
|---|---|
| 99.1 | Press Release, dated January 6, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TPG RE FINANCE TRUST, INC. | |
|---|---|
| By: | /s/ Robert Foley |
| Robert Foley | |
| Chief Financial Officer |
Dated: January 6, 2022
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EX-99.1
Exhibit 99.1
TPG RE Finance Trust, Inc. Announces 2021 Loan Originations of $1.9 Billion and Provides Business Update
01/06/2022
NEW YORK — (BUSINESSWIRE) — TPG RE Finance Trust, Inc. (NYSE: TRTX) (“TRTX” or the “Company”) today announced 2021 loan originations of $1.9 billion and details of its business activity for the fourth quarter and full-year ended December 31, 2021.
Matt Coleman, President of TRTX, said: “TRTX had a very strong 2021 across multiple dimensions, including originations and capital markets. Our originations of $1.9 billion focused primarily on sectors, themes, and geographies that we believe will benefit from strong secular tailwinds and in which we have established relationships and expertise. We believe our strong balance sheet, deep borrower relationships, and connectivity within TPG position TRTX well for continued growth and positive momentum as we head into 2022.”
LOAN ORIGINATION ACTIVITY
During the fourth quarter and full-year ended December 31, 2021, the Company originated 10 and 27 first mortgage loans with total commitments of $651.6 million and $1.9 billion, respectively. New loan investments for the full-year ended December 31, 2021 were concentrated in multifamily (68.2% of total commitments) and office – life science (20.9% of total commitments), reflecting the Company’s continued strategic focus on these property types.
Fourth Quarter 2021
| Property Type | As-is Loan-to-<br>ValueRatio | ||||||
|---|---|---|---|---|---|---|---|
| ( in thousands) | |||||||
| Multifamily | 501,104 | 440,513 | 3.5 | % | 74.0 | % | |
| Hotel | 74,000 | 70,000 | 5.3 | 60.9 | |||
| Office – Traditional | 51,930 | 41,400 | 3.4 | 70.6 | |||
| Office – Life Science | 24,600 | 12,589 | 5.5 | 75.8 | |||
| Totals / Weighted<br>Averages1 | 651,634 | 564,502 | 3.8 | % | **** | 72.3 | % |
All values are in US Dollars.
Full-Year 2021
| Property Type | As-is Loan-to-<br>ValueRatio | ||||||
|---|---|---|---|---|---|---|---|
| ( in thousands) | |||||||
| Multifamily | 1,316,791 | 1,200,841 | 3.4 | % | 73.8 | % | |
| Office – Life Science | 404,600 | 244,139 | 3.8 | 61.2 | |||
| Office – Traditional | 100,505 | 83,925 | 3.5 | 70.8 | |||
| Hotel | 74,000 | 70,000 | 5.3 | 60.9 | |||
| Mixed-Use | 36,440 | 33,700 | 3.6 | 62.2 | |||
| Totals / Weighted<br>Averages1 | 1,932,336 | 1,632,605 | 3.6 | % | **** | 70.3 | % |
All values are in US Dollars.
The weighted average interest rate floor for loan originations during the fourth quarter and full-year was 0.10% and 0.16%, respectively. In addition, the Company made deferred fundings under existing loan commitments totaling $34.4 million and $146.0 million during the fourth quarter and full-year, respectively.
| ^1.^ | Loan origination activity during the fourth quarter and full-year ended December 31, 2021 includes a follow-on<br>loan of $9.6 million (commitment) and $8.7 million (initial unpaid principal balance) relating to a loan originated during the three months ended September 30, 2021. Loan count for the fourth quarter and full-year excludes this follow-on loan.<br> |
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LOAN REPAYMENTS
During the fourth quarter and full-year ended December 31, 2021, the Company received six and 13 loan repayments in-full with an aggregate unpaid principal balance of $420.9 million and $1.2 billion, respectively.
Fourth Quarter 2021
| Property Type | Loan-to-<br>Value Ratio | ||||||
|---|---|---|---|---|---|---|---|
| ( in thousands) | |||||||
| Multifamily | 154,487 | 153,484 | 3.1 | % | 69.4 | % | |
| Mixed-Use | 224,660 | 220,626 | 2.9 | 63.4 | |||
| Office – Traditional | 94,000 | 46,803 | 3.3 | 61.6 | |||
| Totals / Weighted Averages | 473,147 | 420,913 | 3.0 | % | **** | 65.4 | % |
All values are in US Dollars.
Full-Year 2021
| Property Type | Loan-to-<br>Value Ratio | ||||||
|---|---|---|---|---|---|---|---|
| ( in thousands) | |||||||
| Multifamily | 525,987 | 520,703 | 3.2 | % | 75.0 | % | |
| Office – Traditional | 413,500 | 345,502 | 3.0 | 58.2 | |||
| Mixed-Use | 259,400 | 252,626 | 2.9 | 64.0 | |||
| Office – Life Science | 53,603 | 50,892 | 3.1 | 72.4 | |||
| Totals / Weighted Averages | 1,252,490 | 1,169,723 | 3.1 | % | **** | 67.6 | % |
All values are in US Dollars.
The weighted average interest rate floor for loan repayments in-full during the fourth quarter and full-year was 2.12% and 1.81%, respectively.
LOAN PORTFOLIO COMPOSITION
The composition of the Company’s loan portfolio by property type as of December 31, 2021 was:
| Property Type | Credit<br>Spread | Loan-to-<br>Value Ratio | |||||||
|---|---|---|---|---|---|---|---|---|---|
| ( in thousands) | |||||||||
| Office – Traditional | 2,265,188 | 41.9 | % | 3.1 | % | 66.6 | % | ||
| Multifamily | 1,595,643 | 29.5 | 3.3 | 74.1 | |||||
| Hotel | 658,943 | 12.2 | 4.4 | 61.3 | |||||
| Office – Life Science | 494,600 | 9.1 | 3.5 | 61.9 | |||||
| Mixed-Use | 347,408 | 6.4 | 3.1 | 56.9 | |||||
| Retail | 33,000 | 0.6 | 3.7 | 63.6 | |||||
| Condominium | 17,163 | 0.3 | 5.1 | 45.8 | |||||
| Totals / Weighted Averages | 5,411,945 | 100.0 | % | **** | 3.4 | % | **** | 67.1 | % |
All values are in US Dollars.
The weighted average interest rate floor for the Company’s loan portfolio as of December 31, 2021 was 1.10%, compared to 1.66% as of December 31, 2020.
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SALES OF LOANS AND REAL ESTATE OWNED
During the year ended December 31, 2021, the Company sold, in separate transactions, two performing hotel loans with an aggregate unpaid principal balance of $148.5 million. The sales prices were 98.0% and 100.0% of par, producing a weighted average sales price of 99.2% of par.
On November 22, 2021, the Company sold a 17-acre undeveloped land parcel near the southern end of the Las Vegas Strip generating cash proceeds (net of transaction costs) of $54.4 million and a gain for GAAP and income tax purposes of $15.8 million. The Company intends to utilize existing capital loss carryforwards to offset the taxable gain on sale, reduce its taxable income, and retain capital for reinvestment.
These sales transactions generated $66.6 million of aggregate net cash proceeds, after the repayment of associated borrowings, available to invest in new loan investments.
As of December 31, 2021, the Company owned one 10-acre parcel of largely undeveloped land near the north end of the Las Vegas Strip adjacent to the Las Vegas Convention Center with a carrying value of $60.6 million.
CAPITAL MARKETSACTIVITY
For the full-year 2021, the Company completed several capital markets transactions to reduce the cost and extend the tenor of its capital structure, and increase the percentage of non-mark-to-market debt used to finance its loan portfolio:
| • | Closed TRTX 2021-FL4, a $1.25 billion managed CRE CLO with a<br>weighted average interest rate at issuance of LIBOR plus 1.60%, before transaction costs. |
|---|---|
| • | Redeemed 9.0 million shares of 11.0% Series B Cumulative Redeemable Preferred Stock at an aggregate<br>redemption price of $247.5 million, including a $225.0 million par redemption price and a $22.5 million make-whole payment. |
| --- | --- |
| • | Issued 8.05 million shares of 6.25% Series C Cumulative Redeemable Preferred Stock, generating net proceeds<br>of $194.4 million. |
| --- | --- |
As of December 31, 2021, the Company’s non-mark-to-market debt represented 70.4% of its total loan portfolio borrowings compared to 63.5% as of December 31, 2020.
For each of the third and fourth quarter of 2021, the Company declared a cash dividend of $0.24 per common share, an increase of $0.04, or 20%, from $0.20 per common share for each of the first and second quarter of 2021.
ABOUT TRTX
TPG RE Finance Trust, Inc. is a commercial real estate finance company that originates, acquires, and manages primarily first mortgage loans secured by institutional properties located in primary and select secondary markets in the United States. The Company is externally managed by TPG RE Finance Trust Management, L.P., a part of TPG Real Estate, which is the real estate investment platform of global alternative asset firm TPG. For more information regarding TRTX, visit https://www.tpgrefinance.com/.
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FORWARD-LOOKING STATEMENTS AND OTHER DISCLAIMERS
The information contained in this press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to various risks and uncertainties, including, without limitation, statements relating to the performance of the investments of TPG RE Finance Trust, Inc. (the “Company” or “TRTX”); the ultimate geographic spread, severity and duration of pandemics such as COVID-19 and its variants, actions that may be taken by governmental authorities to contain or address the impact of such pandemics, and the potential negative impacts of such pandemics on the global economy and the Company’s financial condition and results of operations; the Company’s ability to originate loans that are in the pipeline and under evaluation by the Company; financing needs and arrangements; and the risks, uncertainties and factors set forth under the heading “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as such risk factors may be updated from time to time in the Company’s periodic filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “continue” or other similar words or expressions. Forward-looking statements are based on certain assumptions, discuss future expectations, describe existing or future plans and strategies, contain projections of results of operations, liquidity and/or financial condition or state other forward-looking information. Statements, among others, relating to the continuing impact of COVID-19 and its variants on the Company’s business, financial condition and results of operations and the Company’s ability to generate future growth and deliver returns are forward-looking statements, and the Company cannot assure you that TRTX will achieve such results. The ability of TRTX to predict future events or conditions or their impact or the actual effect of existing or future plans or strategies is inherently uncertain. Although the Company believes that such forward-looking statements are based on reasonable assumptions, actual results and performance in the future could differ materially from those set forth in or implied by such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s views only as of the date of this press release. Except as required by law, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements appearing in this press release. The Company does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events or otherwise. Past performance is not indicative nor a guarantee of future returns. Yield data are shown for illustrative purposes only and have limitations when used for comparison or for other purposes due to, among other matters, volatility, credit or other factors.
Certain terms used but not otherwise defined herein such as loan-to-value, deferred fundings and office - life science are defined in the appendix to the Company’s Supplemental Financial Information Presentation for the Quarter Ended September 30, 2021, which is furnished as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed with the SEC on November 2, 2021.
INVESTOR RELATIONS CONTACT
+1 (212) 405-8500
IR@tpgrefinance.com
MEDIA CONTACT
TPG RE Finance Trust, Inc.
Courtney Power
+1 (415) 743-1550
media@tpg.com
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