TPG RE Finance Accelerated Lending as Book Value Slipped
Available liquidity climbed to $488.2 million after the lender expanded its financing capacity.
TPG RE Finance Trust (TRTX), a commercial real estate lender, accelerated loan originations in the second quarter, with initial fundings rising to $450.0 million from $135.5 million in the first quarter.
The pickup marked a shift toward portfolio growth. Originations of $466.0 million exceeded repayments by $191.6 million, lifting unpaid principal balance to $4.335 billion at June 30 from $4.145 billion three months earlier. The portfolio grew about 15% from a year earlier, supported by $1.7 billion of originations over the trailing 12 months.
Distributable earnings were $0.23 per diluted share, one cent short of the quarterly common dividend. First-half earnings of $0.48 a share fully covered the $0.48 of dividends declared for the period.
Industrial properties led first-half originations at $290.0 million, accounting for 47.2% of the total. Multifamily and industrial loans together represented 76.4% of commitments, while office exposure stood at 4.3%.
Repayments moved in the opposite direction. Office loans accounted for 95.9% of second-quarter repayments and $227.1 million, or 71.0%, of first-half full repayments. The shift reduced office exposure as the company added industrial and multifamily loans.
TPG RE Finance expanded its funding base with a $400.0 million term loan and a $100.0 million corporate revolver, raising non-mark-to-market borrowings to 85.2% of total borrowings. It also enlarged or added secured facilities with Wells Fargo, Citigroup and Goldman Sachs, while redeeming $597.8 million of collateralized loan obligation bonds. Total leverage rose to 3.32 times from 3.10 times, while the debt-to-equity ratio fell to 2.94 times.
Portfolio credit quality held steady at a weighted-average risk rating of 3.0, though the credit-loss allowance increased $3.5 million to $80.7 million. Book value declined $0.11 to $10.95 a common share despite a five-cent benefit from repurchases. The company bought back 1.3 million shares for $10.8 million during the quarter and another 216,181 shares after quarter-end.