Q1 2020 Earnings Call

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Good day and welcome everyone Cheesy Blackstone mortgage trust first quarter at 2020 Investor call. My name is Tommy and if you're clashes stats at any time these prices starchy railing I silicone and according each all be had to check this year I'd like to advisable parties to compress is being recorded for.

They purposes, and now I'd like to hand over to your host Weston Tucker.

You and good morning, everyone and welcome to Blackstone Mortgage Trust first quarter conference call I'm joined remotely today by Mike Nash Executive Chairman Dot strategies, Katy keen in President Tony.

Her own Chief Financial Officer, and Doug Armer, Executive Vice President capital markets.

Last night, we filed our 10-Q and issued a press release or the presentation of our results, which are available on our website and I've been filed with the SEC.

I'd like to.

To remind everyone that today's call may include forward looking statements, which are uncertain and outside of the company's control actual results may differ materially for a discussion. We're looking statements. We've also refer to certain non-GAAP measures on this call and for reconciliations you should refer to the press release and our 10-Q.

This audiocast is copyrighted material of Blackstone mortgage trust and may not be duplicated without our consent.

So a quick recap of our results we reported a GAAP net loss per share of 39 cents for the first quarter. While core earnings were positive two cents per share with respect to the first quarter.

If you have any questions. Following today's call. Please let me now and with that I'll now turn things over to Steve.

Thanks lesson and good morning, everyone.

We appreciate you joining the call and would have very challenging circumstances for many we hope that you and your family.

March 16th but with the demands of the current market not to mention on performance. Although we did revised seasonal reserve at quarter end it will affect current market conditions.

Tony will take you through the details of the quarter in the reserve methodology, which as a reminder is an accounting address.

It's been and not specific to any loans in our portfolio.

I want to focus my remarks will there be exome to you today amid the pandemic and how our disciplined business model positions us for the staying power required in a time like this.

Coming into this period of volatility the overall real estate industry as well situated with balanced fundamentals responsible industrywide leverage diverse equity and debt participation and liquid capital markets.

VX since he has always been run conservatively with a focus on downside protection or assets and the strength of our balance sheet.

We are a pure play senior whole loan originator with a disciplined approach centered on top quality assets markets and borrowers.

We've never purchased mezzanine loans are securities. Our borrowers are among the best capitalized and most skilled operators in the business you have significant equity in the assets that we finance.

The weighted average origination LTV of our portfolio is 63% borrowers have never missed an interest payments.

Our balance sheet strength begins with our best in class bank relationships and financing vehicles.

We set up these vehicles in light of lessons learned in the GM.

Let's see with no capital markets Mark to market.

We've not had a margin call in the history of our company.

Our balance sheet is further fishing undrawn revolver capacity of $821 million versus the $667 million, we had at year end in both case.

This is net of the quarterly dividend.

On top of that they're a $1.6 billion of unencumbered assets.

Says clarity admission long term relationships with our counterparties.

And stability of our capital structure of the pillars upon which Blackstone real estate 28 year tracker, what was built in how we have successfully managed through the many market cycles over that period of time.

These pillars and that experience are crucial today as cobot 19 has created significant challenges to real estate performance in all property sectors.

Let's talk about some of those challenges.

On the asset side, our whole loan portfolio is now $18 billion in size and every one of our loans is paid interest through April.

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Because of the impact of Cobot 19, we are actively engaged in discussions with our hotel borrowers that others with high exposure properties about their plans protect their assets and what we can do to.

To be supportive.

In some cases temporary deferrals of interest.

The significant equity our borrowers have in these investments provide strong motivation for them to protect their assets and powerful support for our loans.

Blackstone scale on track record as a borrower and reputation for fair dealing help bx since you maintain great relationships with lenders and best in market terms.

Our $9 billion, a bilateral bank credit facilities limit margin calls to credit events and are generally term matched to the maturity of the underlying loans.

The average look through origination LTV is 51% and the loans within each facility or cross collateralized.

But the cobot 19 environment creates affects operating conditions across most property sectors and his incumbent upon us to physician be exome T to thrive even in a potentially more protracted recovery.

So we engaged our largest bank lenders with plans to reduce the leverage in their facilities, particularly as it relates to hotels in other more exposed properties.

In order to reduce the possibility of margin calls and create even greater stability within our capital structure.

As of today, we have modifications closer agreed in principle with our seven largest lenders.

In any financial crisis, maintaining liquidity as a top priority for all businesses.

We are highly focused on building, even more liquidity to achieve the staying power that may be required in the uncertain periods ahead.

And then.

Capital markets activity. However, these traditional sources of liquidity are still likely to contribute meaningfully overtime.

We can also retain more of our quarterly cash flow.

Our biggest use of liquidity is through the equity component of loans advances our share of funding on previously originated loans for Capex Kerry leasing and construction.

Net of financing, we expect to fund 1.5.

Billion dollars over the next 40 years on our existing portfolio.

The pace of Capex and leasing has slowed in the current environment, which will delay the timing of these advances.

All in all we're constructing illiquidity plan to address our working capital needs as less reliant on our greatest source.

Repayments from an 18 billion dollar loan portfolio that we expect to perform well despite the challenges of the current market environment.

As for new business loan demand in the current market is ground to a near halt buyers and sellers lenders and borrowers are generally on the sidelines waiting for the volatility to abate and bid ask spreads to narrow.

What are fun sponsor clients have considerable dry powder not only to defend their existing assets, but also to deploy into new more opportunistic investments was transaction flows resume.

When that does happen, we believe will produce just an attractive lending environment characterized by less competition.

Lower leverage and wider lending margins.

With a great sponsor relationships and differentiated access to high quality deal flow, we are very well positioned for this inevitable pickup in transaction activity.

I'd like to close by noting the strong commitment and track record Blackstone brings to be ex empty.

Blackstone and its employees own 12% of the Exome T.

There is great alignment with shareholders. In addition, Blackstone has agreed to take its first quarter management fees, which totaled $19 million in stock rather than cash.

Further validation of its commitment to be exome tea.

Blackstone real estate has a great track record of successfully managing investor capital through market cycles.

Our philosophy of Big City is deeply informed by this experience and we believe that we will emerge from the current market conditions better position than ever before.

With that I'll turn the call over to Tony.

Thank you Stephen good morning, everyone.

I'll start by echoing Steve's comments on the current environment.

Thoughts are with all those who have been impacted by the covert 19 pandemic, including those who may be facing health challenges, those whose lives and jobs have been offended by the social distancing initiatives and all our medical professionals and other frontline workers, who are fighting this disease and keeping the core of our country running.

Steve covered a lot of ground on our current position and outlook. So I will focus on our once you results, which underpinned the theme Steve highlighted around the strength of our portfolio the strength of our balance sheet and our strong liquidity position. In addition to our gray quarterly results.

Starting with earnings.

Our results were significantly impacted by the current expected credit loss foresees a reserve we recorded in the first quarter.

As a reminder, Cecil accounting standard was effective for VX empty and similar sized public companies on January Onest of 2020.

This new accounting standard requires lenders that record an estimated life of loan loss reserve against all loans in their portfolio and with a few exceptions. This reserve cannot be zero.

To determine our Cecil reserve, we have augmented our track record of no realized losses across the $44 billion of loans. We have originated since our senior lending business launched in 2013 with securitized loan data we licensed from trap LLC.

Although securitized loans are not perfectly comparable to the high quality loans, we make it be exome team, we have tailored our approach to focus on traps loss data for loans that are most similar to our business model, which is focused on large senior loans to well capitalized institutional owners of quality assets located in major markets.

Our adoption of these new Cecil accounting rules resulted in an initial reserve of $18 million or 13 cents per share on January Onest, which was recorded on our balance sheet as a reduction to stockholders equity.

Much has changed since the beginning of the year and while the data we reference for determining our sees a reserve is largely consistent at 331.

Environment in which we must consider that data certainly is not.

Accordingly during the quarter, we increased our c., so reserve by $123 million or 90 cents per share to reflect the macro economic impact of the Coburn 19 pandemic on commercial real estate markets and the general uncertainty around potential future outcomes as the world manages through and ultimately recovers from this crisis.

To develop this estimate we referenced the losses incurred by commercial real estate loan as following the global financial crisis and use that data among other things to further and from inform our current reserve levels.

Although our 331 reserve is large compared to where we started the quarter. We believe it is important to recognize the unprecedented and uncertain nature of this pandemic and believe we fully reflected that dynamic in the reserve we recorded as of March 30 Onest.

We perfectly clear we have not incurred any losses in our portfolio, we have not impaired any loans and the Cecil reserve is not what we believe is reflective of the typical risk of loss for our portfolio absent the economic stressed resulting from Coburn 19.

To that end, assuming continued strong credit performance in our loan portfolio, we we'd expect our Cesar reserve to decline over the medium to long term as markets stabilize although our reserve may increase or decrease in any one particular quarter.

This these are reserved drove the net loss, we reported for the quarter of $53 million worth 39 cents per share as well as of the decline in our book value to $26, a 92 cents per share from $27.82 per share at 12 31.

We reported core earnings for the quarter of $87 million or 64 cents per share, which excludes our 90 cents per share incremental sees a reserve consistent with how other unrealized gains and losses are treated under our existing policies for calculating core earnings and the terms our management agreement with Blackstone.

This quarter, although we saw global interest rates decline in response to the crisis, we continue to generate incremental earnings from LIBOR and other interest rate floors embedded in our loans with $11.4 billion of loans almost two thirds of our portfolio benefiting from active floors as of quarter end.

Overall, our portfolio increased $18 billion, some senior loans with $1.3 billion of originations during the quarter and $1 billion of funding is under these and other loans.

These new originations have low ltvs inline with our portfolio average of 63% and follow our long standing business model of lending against quality assets owned by experience well capitalized real estate sponsors.

Importantly, we also continue to receive regular repayments of our loans with $567 million of loan repayments during the quarter and $178 million received in April.

In terms of credit we downgraded the risk rating of $3.1 billion of loans in our portfolio to a four on our five point scale reflective of the greater risk for loans collateralized by hospitality and select other asset classes that were particularly impacted by coven 19.

Although we believe these loans have a greater risk profile and warranty downgrade on our rating scale, we've not impaired any of our loans as we believe that even considering the impact of the current crisis, there remains meaningful real estate value subordinate to our senior loan positions.

Finally, we have no loans on non accrual status at quarter end as we collected 100% of the interest that was due in April our borrowers continue to support their investments in the asset securing our loans.

We also had an active quarter on the right hand side of the balance sheet highlighted by our issuance of a $1.5 billion yellow secured by participations in 34 of our loans and priced at LIBOR plus 1.13%.

The $1.2 billion of proceeds generated by the CLL allowed us to repay existing credit facility advances and increase the amount of structurally nonrecourse non mark to market that to 35% of our total financing outstanding including our Securitizations, our term loan and convertible notes and our senior loan syndications.

In addition to our CLL, we closed $1.1 billion of incremental financings for our loans all of which priced at pre koby 19 levels.

Consistent with the rest of our portfolio. These new loans benefit from the provisions of our credit facilities that limit margin calls to credit marks determined on a commercially reasonable basis only.

We did not receive any margin calls during the quarter and as Steve noted we have modifications completed all agreed in principle with our seven largest lenders regarding plans to reduce leverage in their facilities. The further insulate us from future potential credit marks as well.

We closed the quarter with a debt to equity ratio of only 2.8 times down from 3.0 times as of yearend and reported current liquidity $821 million.

As Steve noted we are currently focused on strengthening our balance sheet liquidity to bolster our positioning through the impact of the Kobin 19, pandemic and maximize shareholder value over the medium to long term.

With the credit quality of our portfolio are healthy balance sheet and liquidity position in a significant advantages we enjoy as part of the Blackstone real estate franchise. We believe we are well positioned to accomplish these calls.

Thank you for your support and with that I will ask the operator to open the call to questions.

And if I could just remind everyone before the operator open topic, you and I saw the analyst could please limit their questions to one question and one follow up.

Just to make sure we get through the Q that would be I appreciate it.

Thank you so much everyone. Your question and answer session I will now begin if at least next question. Please press star one <unk> deep bad if you're still be Carol you habits. Troy. Your question. Please press Star then Q.

And the first question is coming from the line up for Rick Shane. Please go ahead your hiding the going out.

Hey, guys. Thanks for taking my questions. This morning I.

I'd just like to talk a little bit about modifications generally on the loans you guys cited one transaction this quarter.

I'm curious what type and again I I realize we don't want to talk to you specifically about an individual alone, but generally speaking what type of additional.

Capital might you expect borrowers to contribute and are there ways not only I realize you're giving up some spread in those transactions, but is are there places where you pick up additional economics.

Thank you very dedicated yeah, I think that when we talk about nods, we're really starting from a position, where we had low leverage loans and very well capitalized sponsored the vast majority of our loans or response has been over a billion dollars balan and that their perspective that they're bringing they had long term views on the value there.

With that and they have reiterated today, including all of our hotels sponsors.

I have been strong attention and ability to support their assets during this period.

So our conversations with them about my God I really focus on how the assets can be back possessions to work through the period disruption.

We're not talking about any type of interest relief on the small number of bonds, where we're talking about some interest deferral, which really is just a handful in our portfolio at this stage, it's really a timing difference. So we expect to get paid all of our interest over time.

And those conversations are paired with meaningful additional equity investment the details that you as you point out sort of Barry from loans alone, but in general we're looking at ensuring that the assets are well possessions to carry through the period of disruption.

Got it great. That's very helpful. And then just one bookkeeping question for me.

When you talk about the reserve with C. So are you said a number of 140.4 million and we see how that builds but when we look at the balance sheet allocation. Its 112.7 million Where's the rest about allocated just so we can sort of follow it overtime.

Sure this is Tony and and.

I'll I'll apologize for the waste as me wrote the Cecil accounting rule, they make it a little bit harder to find but it's all in the 10-Q, so that the portion you're seeing right on the balance sheet as the portion that is allocable to the funded amount of our loans. The Cecil accounting rules also require reserve for the future funding component of the loans and that component sits at.

In other liabilities. So if you look at our 10-Q I believe its note for other assets and other liabilities, you'll see some further disclosure about the C., So reserve and that'll give any other balance sheet components in that now.

Perfect.

Thank you so much.

Certainly.

Next question is coming from steep <unk> Delaney. Please go ahead your liking the coal.

Good morning, everyone I'm, Steve in your comments you sounded like beeps, both sides of the market from a transactional standpoint, we're we're kind of frozen in a wait and see I'm. Just curious if I know your folks you're working on asset management, but do you expect to.

Would you consider any new loan request over the next two or three quarters or is it you know just the doors not open right now.

Oh, Thanks, two questions you know I think the jury.

The doors always open for good opportunities for us and yeah, we have great market access and great relationships.

And I do think that our borrowing base is particularly well position.

To be early movers, and opportunistic investing that will inevitably occur through this crisis period.

Right now the market's pretty pretty frozen you know when usually when you enter a period of high volatility you typically see buyers and sellers and the lenders in the bars, everybody moves to sidelines and sort of waits for things to settle out.

And I think you know its fire expectations tend to be high end.

And so is very hard for deals to be made.

Right I do think though I do think that yeah, we've seen a little bit more liquidity in the market.

And yeah, we see near the CMBS deal. This week, so we've seen a little bit of a have a breadth of white goods to unlocking the capital markets, a little bit more and you know that the debt markets have been have been flow even more significantly than that so that maybe that maybe that will indicate they'll be that we'll start seeing some transaction volume, but we wouldn't expect to see anything for a quarter.

The two based upon our present outlook.

Got it got it that's helpful and then on the repayment side, but little over 500 in the first quarter and [noise].

You know kind of at the same run rate would you think if if we were just a model out something in that you know half a billion 600 million a quarter over the balance of the year that that is that'd be a reasonable expectation for repayments. It sounds like you're gonna you would expect them to slow down versus the percentage repayment that we saw in 2019.

Yeah.

Yes.

I think that's a that's correct as an observation you know the repayments that we had the first quarter, where we're definitely concentrated in January and February sort of before we begin to feel the impact on on markets Oh.

Covert 19, so we do expect prepayment speeds to be at a slower pace and then the historic levels in the levels, we would've expected.

Absent the current market conditions vary.

Very difficult to predict the repayments and a lot of that will depend upon.

You know liquidity in the market and again that those same factors that we talked about in terms of creating a new business will.

Why those same factors what generates the repayment volume in our in our in our portfolio as well, we do expect to see some repayments.

And there will be in so there will be some.

Liquidity coming through that channel, but I think slower the slower than the historic pays very hard to peg a number.

We'll just take it quarter by quarter Cabot well. Thank you for the comments then everyone stay well.

Thank you Steve.

The next question is coming from Doug Harter These color hedging the coal.

Thank you.

I guess as we're thinking about the liquidity position that any sense as you can give us as to the de leveraging that will take place in your conversation with with your second largest lenders.

Sure sure Doug Hey, it's it's Doug here. The first thing that I would tell you is that the agreements reflect a balance of priorities and optimizing liquidity and enhancing stability our twin goals for us. So the answer in terms of the impact on liquidity is not.

As much as you might think there's an array of ways to de lever cash payments is one but pledging additional collateral and changing waterfall structures are others will use all the tools in the tool kit overtime to achieve the deleveraging that we need.

Each agreement is different and the specifics are obviously confidential.

But we believe we've addressed the potential for for credit marks, especially on our hospitality assets as Steve mentioned and developed a further flexibility that we need you know during the heavily coated 19 impacted period.

Now I'll just go back to the beginning on you know the starting point for US just in terms of context for these agreements.

You, which is that they're in the context of our pure plays senior loan portfolio Bx relationships with both our borrowers and the banks.

And it's a very healthy context, and that and we're happy to address the concerns of our banks in that context, we feel that the agreements reflect the alignment of interest that we have with them in terms of managing through this is covert 19 impacted period.

[laughter].

Thanks, Doug and just kind of following up on that when you. When you say kind of changing waterfalls does that does that sort of change kind of how the cash flow kind of as loan repayments or interest payments received.

Comes back to you and I guess, just how does that kind of.

Factor into kind of your quarterly cash flow just to make sure understood your comments.

Yeah and in terms of deleveraging I would think about that more with regard to principal payments that interest payments.

But there are a whole array of options in terms of you know achieving that de leveraging and that that is one of them, but we've got a bunch of tools in the tool kit I think our cash flow you know going forward is going to continue to reflect you know the fact that we've got a very large scale portfolio performing first.

Mortgage loans that are generally speaking current pay a current pay loans.

Alright, Thank you Doug.

Your next question is coming from Aaron its taking all that please proceed your lacking the coal.

Thanks, I was hoping we could talk a little bit about the decision to move the hospitality assets to category for on your risk rating I believe that's it's lifted this high risk potential for a lot.

I I get that completely understand it the bulk of those have ltvs that are kind of 70% below.

And more like 65.

Hey would it would take it pretty dramatic decline in.

It was a hotel asset values to really get into your.

Into your loans, maybe you could just talk a little bit about.

Oh, you know is their actual potential for last there is it just because we had no idea what the values of these you're going to be in in 18 months and what are some of the sponsors doing to help alleviate the risk there.

Yeah, I'm happy Katy so to your point, we continue to feel very good about the quality of our portfolio the assets and our sponsors and we are starting from a very low leverage point on me about that.

But you know we're mindful on cognizant that this is a very challenging environment and as a result, and we thought it was prudent to downgrade. These lines based on the operational impact that could 19, particularly on our hospitality assets, which are right now experiencing disruption in cash flow.

It's really a reflection of our you know prudence and sort of uncertainty about exactly what's going on what the you know overall timing, it's going to be have the recovery of these assets, but the loans continue to perform they have strong well capitalized sponsors. They started at low leverage point. So you know to your point there would have to be it's embarrassing.

Yes, again declined in value, it's actually impact upon our balance of our alone but with all that said, we just felt it was appropriate to move into four ratings in view of the current disruption in the possibility of an elongated recovery.

Thanks in in these conversations you're having with the sponsors are they showing a willingness to putting additional I can I get on understanding how that works from a structural perspective do they have like.

And he's been a special.

He is where they can add additional equity to that so the property Im just trying to understand how that would work.

Yeah, I would say all bark Bonterra then as I'm sure you can imagine we're in very frequent close dialogue with our sponsors on our hospitality assets as well as our overall portfolio.

We continue to reiterate their intention and their ability to support these out that you know these are good assets with business plans that they believe will still be viable, Jeff prolonged or sort of pushed back through the period of disruption and because we have always been very focused on lending to large well capitalized sponsors generally large private.

Equity fund they have the liquidity to invest additional capital on these assets in order to carry them. So you know without it looked like would be contributing additional equity you know to the property its use a borrowers yeah to provide for the ability for you know the cash flow to carry through the period of disruption and get the assets.

The other side so they can bring doom implementing their business plan.

Thank you.

The next question is coming from Jade Rahmani. Please proceed.

Thank you very much and that glad to hear from everyone.

In terms of the hotel loans the slides no 1.2 billion of outstanding credit facility borrowings would you expect 10% to 20% to pay downs to occur on those borrowings over the next one to two quarters in order to.

De leverage that financing.

Hey, Jade its Doug you know I'd I'd reiterate my my previous comments in terms that de leveraging you know we the specifics are different you know for each bank. It within the context of cross collateralized portfolios. You got involved you know a significant portion obviously the vast majority that are not hospitality assets.

And so you know we wouldn't quantify the de leveraging you know in those terms.

We would say that you know that we do feel like we've addressed in the context of our relationships with these banks.

We've addressed.

The potential credit mark issues on the hospitality assets in particular with these agreements.

Okay [laughter], the 1.6 billion of unencumbered assets can you. Please.

Describe what those.

Well that pool consist of I mean, when I look at the balance sheet and make an estimation myself.

I come up with a much lower number somewhere around about 200 million. So.

Found that someone surprising and just I wanted to ask about that.

Yeah, Hey, it's Doug again, that's a good points I think you know that $1.6 billion of unencumbered assets reflects.

Uh-huh a couple of different categories of loans. There are some currently unfinanced Ah first mortgages and there are also a different positions you know a routine security interest relative to our COO transactions and says be CMBS transactions.

And other I, you know structured interests in our first mortgage portfolio that make up the balance of that.

There's also by the way I'm, a significant amount of cash on the balance sheet. That's not included in that number but is also part of our unencumbered asset package. So to speak on if you think about it from that perspective of you know the subordinate in corporate debt and our capital structure.

[noise]. Thanks.

The next question is coming from Stephen Laws. Please go ahead your Latin core.

Thank you.

Good morning to follow up on Steve Delaney his comments I appreciate the.

Comments around the repayments and in a slowdown there can you talk about the unfunded commitments little bit or the expected drawdown on that a ending but you know how you how you expect that to be on a net basis relative to the repayments.

Hi, Stephen This is this is Steve.

Yeah, historically, our repayments Oh, the impact of already payments as far far exceeded the.

The equity requirements associated with that with our with our future fundings in the future funding smart connected to loans that we previously made.

That are very strong assets like call. It like all the others in our portfolio and yeah. We fund the future fundings <unk> related to the progress of construction would have big component of it relates to good news so as properties <unk> realize additional leasing.

We covered that the cost of leasing commissions and tenant improvements and.

And so a lot of this future funding is value adds it increases the value of the underlying real estate and improves our loan to value ratio.

The the magnitude of the future fundings.

He is well handled by our liquidity, both our existing liquidity and the repayments, whose reasonably expect to get overtime and also any alternative sources of liquidity that we might we might feel compelled to tap or in any kind of an environment, where perhaps repayments are slowed relative to historic levels, but we.

We feel very good that about our ability to meet those and also again the impact of the impact of those advances tends to be very positive on the real estate.

Great appreciate the color on that and as a follow up any additional disclosure or comments you remember right around the LIBOR floors I think at quarter end LIBOR since quarter end LIBOR is down around 60 basis points. I believe so you know where should we think about a weighted average LIBOR floor or how do we think about the impact of.

Her benefit of those floors.

Other been realized in the last month.

Hey, it's it's it's Doug I'll take that one.

The I think the important point to consider I'm thinking about those LIBOR floors and there is you know they are significantly in the money into contribute.

You know significantly to our earnings in a in the first quarter they'll contribute more significantly in the second quarter, given where LIBOR is today, but the important point to keep in mind. There is that it's not the weighted average strike price of the floors that matter so much but the <unk>, but the difference between the those strike prices and the corresponding.

Floors or absence of floors in our financing so we're able to lever the benefit of that you have that income I'm you know in into our bottom line and we do expect it to be a continued significant contributor to our core earnings on a go forward basis.

Great appreciate the update everyone take care.

Thank you.

Next question is coming from George commodities. Please proceed sir at identical.

Hi, good morning.

Are you.

Give us a sense of how many borrowers are roughly what percentage of the portfolio that has asked for interest deferral forbearance or other loan modifications.

Sorry, George you know to address that directly however, overall portfolio. We've got 20 loans that were currently talking about various types of modification, but less than half of that is around interest deferral I think the important point to keep in mind as we mentioned earlier as you know we are talking about interest.

Well, we're not talking about interests really if they were also hearing those conversations with additional equity coming into the deals that are most impacted by called bad we view that overall at the positive because it increases our level of 'cause becomes another commitment of our spot yards, which is already quite substantial to these assets, but you know continues to increase.

It over time and reflects their desire to continue to support the assets.

Great. Thank you for that that Takeda and just.

A follow up on on prepared remarks, you had referenced a high repayment amount for the month of April can can you just repeat that number address that.

Sure It was a $170 million.

Great. Thank you so much.

My final question comes from nine of care Qs. Please proceed your identical.

Good morning, everyone.

In light of the challenging backdrop and wanting to increased liquidity could you remind us oh the dividend policy since dividend coverage relative to core earnings has tightened.

Sure.

I would you say generally that delivering income to shareholders is always a top priority for us.

We just paid the Q1 dividends, it's only been <unk> about two weeks ago.

After that payment, we still had over $800 million of liquidity.

And I think the next dividend discussion that we will have with the board will be in June regarding to the <unk> Q2 dividends.

And you will make a determination based upon the facts and circumstances at the time.

But our dividend policy our goals remain that you know it's a is very significant.

Priority and objective for us to continue to provide income to shareholders that hasn't changed.

Okay and then my follow up is should we continue to expect management these to be paying stock.

I think there'll be a quarter by quarter decision on the part on the part of Blackstone, Yeah, great gesture of support and alignment by Blackstone's to agree to take its fees in stock I rather than in cash nice contribution to our liquidity, but more of a statement of alignment and commitment to the be exome tea business.

It's something that will discuss with Blackstone in future quarters.

And we'll and we'll take it quarter by quarter, but I think again I think what you should take away from that is just the important and significant statement that make that Blackstone has made in terms of their belief in their commitment to be excellence.

Okay, great. Thank you.

Thanks for your question monitoring questions, everyone and I tend to cold back to Weston Tucker for closing remarks.

Great. Thanks, everyone for joining us this morning, and please reach out to me after the call with any follow up.

You got your one that concludes your conference call for today you may now disconnect. Thank for joining can enjoy the rest of your day [noise].

Oh.

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