Q2 2020 Granite Point Mortgage Trust Inc Earnings Call
[music].
Good morning, My name is there and I will be a conference facilitator.
At this time I would like to welcome everyone to granite point more good <unk> Trust second quarter 2020 financial results Conference call.
All participants will be in listen only mode.
After the speaker's remarks, there'll be a question and answer period.
Please note this event is being recorded.
I would now like to turn the call ever to Chris Patten.
With Investor Relations for granite point. Please go ahead.
Thank you.
Good morning, everyone. Thank you for joining I'll call to discuss granted points second quarter 2020 financial results.
With me on the call. This morning, our Jack Taylor, President and CEO, Mark <unk> our CFO.
Weve out part of CIO, and B plus I wish you all.
After my introductory comments Jack will review all current business activities and provide a brief recap of market conditions.
Steve Alport will discuss our portfolio and more symbol highlight key items from our financial results.
The press release and financial tables associated with today's call as well as our form 10-Q filed yesterday with the S. You see.
If you do not have a copy.
They find them on our web site or on the Fccs website at <unk> Dot Gov.
In our earnings release, and slides, which are now posted in the Investor Relations section of our web site. We've provided a reconciliation of GAAP to non-GAAP financial measures.
We urge you to review this information in conjunction with today's call.
I would also like the bench and that this call is being webcast and may be accessed on our website in the same location.
Before I turn the call over the Jack I would like to remind you that remarks made by management. During this conference call and the supporting slides may include forward looking statements.
Forward looking statements reflect our views regarding future events and are typically associated with the use of words, such as anticipate expect estimate and believe for other such words.
We caution investors not to rely unduly on forward looking statements.
They imply risks and uncertainty and actual results may differ materially from expectations.
We urge you to carefully consider the risks described in our filings with the FCC, including our most recent 10-K and 10-Q reports, which may be obtained on the Fccs website ICICI DACO <unk>.
We do not undertake any obligation to update a correct any forward looking statements. If later events proving to be inaccurate I'll now turn the call over to Jack.
Thank you, Chris and good morning, everyone. We would like to welcome you all and thank you for joining our second quarter 2020 earnings call.
These past months are presented historic challenges to our country, our industry and our company.
We do not change, but rather to reinforce our core beliefs and approach.
We exercise preserving and ultimately expanding the value of our business for the benefit of our stock holders over the long term by actively managing both sides of our balance sheet.
Sure extensive experience managing through multiple cycles, we understand that edits core this was a relationship business and they did is critical to maintain strong productive ties to our borrowers and lenders.
This approach best preserves and enhances our assets and stabilizes or liabilities.
Maintaining liquidity to support our operational needs and goals is also were primary focus which has led us to explore potential new funding sources to better position. The company for this uncertain environment and to take advantage of what we believe will be attractive investment opportunities in the future.
Upon the onset of the Cold 19 pandemic, we swiftly turned our attention to asset and liquidity management to a number of initiatives focused on preserving the value of our investments and the franchise value we have built.
And I'm happy to report that we've made significant progress in the second quarter and have continued our efforts since.
Although portfolio continues to perform very well through this period of uncertainty.
At quarter end, we had no impairments or non accruals and our collections of debt service have been strong has over 99% abrupt borrowers who have made their payments in accordance with the terms of their loans.
Along with the strong payment performance, we have worked with the number of our borrowers to provide go with short term relief for the impact of the pandemic all their properties.
And the majority of those cases that has meant a partial interest to full and exchange where some form of further borrower capital commitment to their properties.
Regarding our liabilities and as we mentioned on our last call. We have been focused on creating additional balance sheet stability.
We proactively reduced borrowings on our repurchase financing facilities by using about $100 million of cash and own cupboard collateral and entered into margin call holidays for a period of time with three lenders representing a combined total of $1.4 billion of outstanding balance.
We maintained an active and constructive dialogue with all of our financing providers are in compliance with all covenants and don't have any outstanding margin demands.
However, considering the market uncertainty caused by the pandemic, we continue to focus on improving our liquidity and further stabilizing or financing facilities.
As an early first step to generate liquidity, we opportunistically divested a $20 million uncovered hotel loan that was previously risk rated four.
Additionally, and as we discussed last quarter, we began the process with Evercore, our financial advisor to explore various longer term financing alternatives to better position the company for the current environment and for future opportunities.
Our processes generated very strong interest from multiple sophisticated institutional who recognize the value of our business as well as our assets.
Based on the progress we have achieved we are optimistic that we will be in a position to further substantially strengthen our balance sheet by raising capital from a high quality institutional partner.
Since quarter end, we have also taking additional steps to improve our liquidity and balance sheet flexibility.
As we disclosed in our 8-K filing in early July we amended our financing facility with one of our largest lenders and increased our borrowing capacity for a period of time, which generated over $54 million of cash.
Our ability to grow our partnership during this volatile period with one of our key financing Counterparties speaks to the quality of our assets and the strength of our lender relationships.
In addition, and to further strengthen our liquidity position.
After quarter end, we completed a solo six loans at attractive prices with the principal balance of $191 billion and total commitments of over $206 million.
Which generated about 40 million of additional proceeds.
As a result of these actions as of last Friday, our cash balance was approximately $145 million, providing us with ample liquidity to manage our operations in the near term as we continued to progress with our longer term financing initiatives.
Despite the higher provision for loan losses, it a realized loss on the loan we opportunistically sold as part of our earlier liquidity effort.
Our operating results in the second quarter showed the overall strength of our portfolio as our net interest income expanded significantly over the prior quarter aided by the LIBOR floors and our loan portfolio.
Steve Alport will discuss the portfolio next but in summary, we did not originated any new logo in second quarter as our focus was on maintaining our liquidity.
We funded about 71 million over existing future funding commitments, which continued to be financed by our lending partners.
We did not receive any tool loan repayments in the second quarter low since quarter end, we have realize some repayment activity, providing us with additional liquidity.
We would anticipate seeing will repayments over the rest of year, but the exact timing and volume is very hard to predict based on the current state of the markets.
Although the performance of the major capital markets in the second quarter suggested a degree of stability is returning.
With Rolling regional Cobot, 19, eruptions and shutdowns that may continue a fundamental economic recovery will probably roughly require large scale implementation of major medical solutions like more effective treatments and vaccines.
We accordingly, our positioning ourselves to take advantage of new opportunities and protect our portfolio during further economic and market uncertainties.
In summary, I'm very pleased with and proud of the strong performance of our portfolio and our entire team in response to this market environment.
We've accomplished a lot and made a lot of progress over the last few months to better position the company for the current environment and for future success and growth opportunities.
We will continue to work on further enhancements with the overarching goal of protecting increasing value for our stockholders overtime.
Now before turning the call over to Steve how part one final comment.
On March 2nd Twentytwenty, The company announced that it has agreed to a process with the manager to in fertilizer companies management function.
In connection with this process the company and the manager have entered into a confidential binding arbitration to determine any of us payable by the company to the manager.
In consideration of the managers agreement to terminate the management agreement and the matters undertaking of other obligation pursuant to an internalization agreement to be entered into between the company in the manager following the conclusion of the arbitration process.
The arbitral hearing has been delayed based on the cobot 19 pandemic and the company currently expects that the hearing will take place during the third or fourth quarter of 2020.
Because of the continental nature of the arbitration, we will not be taking any questions on it or the internalization process.
I would now like to turn the call over to Steve ballpark to discuss our portfolio and recent activities in more detail. Thank you Jack and thank you all for joining our call. This morning.
Over the last few months as the impact on the economy in commercial real estate market from overnight endemic has persisted we remain focused on asset management and working with our borrowers and lenders.
He constructively managed through this challenging period.
Serving this market environment, we believe that our portfolio had so far performed very well from a credit perspective.
Our debt service collections were strong in Q2 with over 99% of our borrowers making their payments according to their term.
At June Thirtyth, we had no impairment non accruals for maturity default.
As part of our proactive asset management strategy and given the current commercial real estate operating environment. We have engaged in discussions with many of our borrowers regarding various types of loan amount.
Most of these discussions that amendment that involve our hotel and retail loan which accounted for about 24% of our portfolio at June Thirtyth.
Our approach has been to provide our borrowers with the time to manage through this challenging period and in the majority of cases improve our position are requiring sponsors to make further financial commitments to their property.
For the most part we have granted short term relief the form of reallocating reserves were deferring rather than waiving some portion of loan into.
In the majority of cases resetting the LIBOR floor to actual LIBOR.
We have a strong collection of high quality institutional borrowed and sponsors we remain focused on protecting their equity in their assets while navigating through.
Business disruption.
During the second quarter, we moved 15 loan to a rich ranking category of for.
The downgrade to four to four ranking does not mean that we believe there will be losses on these loans, but reflects the difference in the risk associated with them from our March 31st to June Thirtyth assessment.
And our largely associated with the growing impacted the Kobin 19 endemic on the real estate market economy has a whole.
You might expect most of the movement in our risk rating related to the hotel in retail loan.
We will continue to monitor market property specific development across all of our investment as the all navigate these uncertain time.
The Jack mentioned, we did not originated any new loans during the quarter and did not realize any full loan repayment.
We funded approximately 71 million pre existing future funding commitment, which our lenders continue to finance and they remain constructive and supportive of our business.
Yes, Dandy principal balance of our loan portfolio as of June Thirtyth was approximately 4.4 billion.
5.1 billion, including our future funding commitment.
Our highly diversified portfolio of 120 <unk> loans as of June Thirtyth is distributed across a wide range, if you'd rapid market property type sponsor.
As of June Thirtyth, our portfolio weighted average stabilized LTV at origination was 64%.
99% of our investments senior first mortgage loan.
We believe our assets will continue to exhibit strong credit performance, but we do not expect to be totally immune to credit event given the impact of over 19 on the current real estate market, which is likely to continue for some time.
The first six month of the year, we had a little over 100 million of loan repayment, but over the last several weeks, we've realized about a $158 million repayment.
Some of our sponsors are restarting the process to sell or refinanced the property given some renewed activity in the theory debt capital markets.
We continue to expect significantly lower than historical pace of repayments over the next few months quarter.
However, the repayment we have recently realized enforced our view of the credit quality of our portfolio.
In the coming month, we expect to keep our focus on asset liability and liquidity manner.
Overall long career good business, we have successfully navigated many different economic cycle and market disruption as a result of our teams extensive and broad experience in the commercial real estate market in a relatively short time period, we have been able to establish rented point has a well respected unreliable counterparty, we believe that as we further stabilize our bank.
I see in the coming month and that transaction activity begins returned to the commercial real estate market, we will be in a position to take advantage of select emerging market opportunities presenting attractive risk adjusted returns through our shareholder.
I'll now turn the call over to Martin for a more detailed review of our financial results.
Thank you Stephen Good morning, everyone. Thank you for joining our call.
Our portfolio continues to perform well in light of a challenging macroeconomic environment.
As Steve mentioned earlier, our collections of that service on our loans have remained strong but it is hard to predict the future and given the ongoing disruptions to the economy and commercial real estate market.
It would not be surprising to see some pressure on the ability of our borrowers to make payments going forward.
Aided by the LIBOR floors embedded in our loans, our net interest income for the second quarter increased by about $5.2 million to 34.4 million.
Our says 29.2 million at first quarter.
However, this benefit was more than offset by 14.2 million or 26 cents per share provision for loan losses.
It's higher provision was largely a result of us employing and our Cecil modeling and updated third party macroeconomic forecast that reflect that further impact from that covered 19 pandemic.
Our results also include a 6.9 million or 12 cents per share realized loss on a sale of an unencumbered loan.
Which we opportunistically executed as part of our liquidity management.
Lastly, our operating expenses were a bit higher compared to Q1.
Mostly due to professional and advisory fees.
All these factors resulted in a second quarter GAAP net loss of about 1.7 million or three cents per share.
Our core earnings for the second quarter were 13.8 million or 25 cents per share and include the realized loss on the loan sale I just mentioned.
Book value as of June Thirtyth was $17.47 per share and included $1.50, 7% reduction.
As a result of the aggregate impact over the adoption and application of the Cecil accounting standards.
Additional details regarding Cecil impact on our financial statements can be found on pages, five and six of our earnings presentation.
Given to persisting at unprecedented macroeconomic conditions and uncertainty caused by the pandemic.
Our board of directors and management team continue to believe it prudent and in our best interest to remain focused on liquidity management, while we continue to explore longer term financing alternatives to further strengthen our balance sheet.
As a result, our board of directors decided to continue to temporary suspension of our common stock dividend for the second quarter of 2020.
We will continue to evaluate our dividend policy in respect to future quarters based upon costamare considerations, including market conditions and read related distribution requirements.
As of June 30, we had over $25 million in undistributed taxable income.
Our long term goal is to provide our investors with an attractive dividend income stream.
We will continue to monitor taxable income and work with our board of directors to take any necessary measures to ensure that we made minimum distribution requirements to maintain our reach status.
Which as a reminder is an annual pass.
Turning to our balance sheet the outstanding portfolio balance was largely unchanged at about 4.4 billion as of June 30.
It was 99% comprised of senior first mortgage loans.
Last week, our portfolio about decreased to approximately 4.1 billion.
And it reflects the realized loan repayments and select loan divestitures executed over the last few weeks since quarter end.
We had about 56 million knows of cash on June 30, and about a 145 million as of August seven.
As a result of the activities mentioned earlier.
We ended the quarter with total leverage including the non recourse not mark to market Siloed debt of about three and a half times debt to equity and our recourse leverage what about two and a half times both of which also reflects the impact of C. So on our GAAP equity.
Finally, I'd like to conclude with a quick recap of our allowance for loan losses.
As I mentioned earlier during the second quarter, we recorded a provision for loan losses over 14.2 million in our income statement related to the application of Cecil in Q2.
The cumulative impact of book value of our total CECO reserve is about 86 million or dollar 57 cents per share.
Now represents approximately 170 basis points of our total loan commitments as of June 30.
Our provision for loan losses recorded in Q2 is largely related to the continued negative outlook on the broader economy and commercial real estate market related to that pandemic and there's not specific to any loan losses or impairments in our portfolio.
For further discussion of the Cecil topic, please refer to our 10-Q.
Thank you again for joining us today and now I will ask the operator to open the call two questions.
Thank you.
We'll now begin the question and answer session.
You asked a question you May Press Star then one on your Touchtone phone.
If you use and speakerphone, please pick up your handset before passing lucky.
So let's try your question. Please press Star then Tim.
At this time, we'll pause momentarily to assemble our roster.
My first question comes from Stephen Laws with Raymond James. Please go ahead.
Hi, good morning.
First jacket to follow up on your comment are you prepared remarks around the the repayments to date and third quarter have those been a full re loan repayments or they've been partial repayments can you give us any color I believe it's around 160 million since quarter end.
Those have been a full loan repayments there may have been.
Of amortization or something but I don't believe so those are.
Full loan repayments.
Great and Steve I think you mentioned a few different things in a modification or discussion you don't have you had oh, you know sponsors contribute more equity can you can you maybe give US. An example of how those conversations are going how much you're deferring or any type of pik income that's taking place in those modifications.
Sure Hey, Steve Good morning, Thanks for thanks for joining us today.
So as we as I mentioned, we've we've modified.
A number of loans. The majority of these amendments or short term I would describe as modest in nature. The specifics if each amendment varied, but the common themes are to defer a portion of the debt service payments for a few months. It typically about three months as I mentioned in my earlier remarks is typically by resetting the library.
Florida, actual LIBOR or to be repaid from actual cash flow.
Getting borrowers some flexibility of tapping into reserves on as we mentioned, we're also typically requiring a sponsors to put in additional equity. So the specific of each one varied but those are some of the common themes.
Great and lastly around unfunded commitments help how much of the remaining a just a 670 million I believe.
You know as is is good news money how much is available will be drawn down now how do you think about the timing of the drawdown of unfunded commitments.
Sure the well the timing is novelty highly variable on depends on what's happening in the market you know in a bull market when loans are being refinanced before they mature we would expect that loans would pay off before.
Well the fundings are drawn in this environment loans are likely to extend and the pace of future funding may slow go into what part of your question a significant amount of the future fundings relate to good news money.
And certainly over the last couple of months, we've seen you know a slowdown pause I would say in leasing and we assume for liquidity purposes that all of the future fundings of drawn but in this environment, we do expect that would slow down.
Great appreciate the color. Thank you.
Thank you for your questions.
Good to hear from you.
Our next question comes from Steve Delaney with JMP Securities. Please go ahead.
Well good morning, and congratulations on the progress that's been made since the last call in May.
Stacking up we're sure picking up where Steven left off about that the loan sale. The feature findings the third quarter loan sales. The six loans can you comment on which types of loans. It looks like about 32 million average, which is in line with your your average loan size, but if you could comment on the types and.
What's your objective here to remove future funding requirements part of that near 700 million or was it to kind of <unk> reduce some up specific credit risks that you saw in those loans I. Appreciate any color you can get bought back when sales.
Hi, Stephen this is Jack and how to answer that.
Yeah. So that was part of our liquidity management, we selected a limited number of loans to potentially sell to generate interim liquidity and that was selected based.
Was done in a manner that would not significantly alter the composition and characteristics of our portfolio.
And and so we didnt sell off distressed assets or anything like that it was meant to not alter the characteristics of the portfolio and it was is quite small in comparison to full size of the portfolio well sure. So it accomplishes you accomplished since a purpose and increasing our liquidity well.
We can working through the larger capital financing process.
So this really was an opportunistic sale such sales are not part of our main strategy and we're not even market currently selling loves.
Got it and this concept you know we've seen several instances of loans that had been sold I'm. Just curious is is that more of a direct markets such as Robert Youre reverse inquiry or is there actually oh somehow a brokerage market like through someone like he's still where you can actually.
Potentially post a few loans and get a lot of eyeballs on them on and their name basis.
Well, we we we understand that there is such a confidential a discrete loan marketing process through brokers, we did not use a broker this was done.
In conjunction with I would say or Evercore process, but was really some direct contacts or experience is that.
Oftentimes when you use a broker, especially during a.
A severe downturn to something that tends to it it's not the brokers, but a broad marketing that sort of brings out a lot of a waste of time and activity. Because there are lot of people thinking that you're in a distress certainly mode, which we were not you didn't want assembly once again to the market got it makes sense and my last question.
You know you've made good progress on liquidity and now at 145 million is there a targets level of liquidity or maybe as a percentage of the portfolio that you're trying to achieve before the board would consider reinstating you know a modest cash dividend and I realize that part of that.
Net liquidity balance May also have something to do with your with your Evercore project. So any color you could give us about you know at what point I guess is what I'm trying to get to Jack at what point in your Oh, creating liquidity improving the stability your financing when do you think the board would at least be will.
Thing to consider off some amount of cash dividend. Thank you.
Well. Thank you for the question and Oh actually asked Marson to Russia.
Hi, Good morning stay thank you for joined high Marseille, Yes of course.
Look I think you know our liquidity obviously, it's a it's a major focus for us and I think you know for the time being we're comfortable with where we are today, obviously, where we don't have had outstanding cause for further deleveraging on anything like that however, we're not taking.
That state of state of affairs as as then your normal. So we are continuing to focus on for the stability of the balance sheet.
As we are pursuing other alternatives I think there that is tied I would say large they also with the dividend I think our dividend is more of a function of liquidity rather than earnings we are generating earnings and and all the online or wheat, so we need to pay attention to the distribution requirements as a read and all that so I.
Thank you once once we have more liquidity on a balance sheets I'm not for the next several months or more but more longer term I think I think that's that's how we're looking at in terms of a dividend.
Okay.
Reshaped everyone's comments thank you.
Thank you.
Our next question comes from Jade Rahmani with KBW. Please go ahead.
Good morning, everyone. This is Ryan on for Jay Thanks for taking the questions [noise].
Good morning, I appreciate it good morning appreciate the color on the risk score I'm loans, just wondering if you can.
Provide some additional.
Color around if there are specific assets in that bucket of seismic calling out that you think might have a more near term risk of impairment or default.
Hey, Ryan as Steve Good morning.
So as you heard US say, we moved a number of loans.
And to the risk rank for category this quarter.
And Jack I mentioned that about half the loans or not so great that back the majority of the ones that we moved in this quarter, our hotels and retail loans.
And it's it's really less about I would say specific concerns on specific assets. It was more just a.
What about what's happening in the market overall as a result, the coping 19 and that certainly in the short term, possibly in the medium term business plans are going to be delayed.
Okay, and then just in terms of the any asset management strategy can you say what percentage of loans by principal balance you've made modifications on so far.
I'm sure happy to have it started to talk about that so we've modified our amended a little over quarter of our portfolio.
Again, a concentrated in our hotel and retail loan.
Very important to note that the majority of these amendments.
Our short term modest in nature, I think I commented on that little bit earlier optical over quarter of the portfolio.
Great and thinking about alternative sources of capital at this point do you think preferred equity is more likely option that you're looking at and how do you think a cost potentially saying in the double digits changes the economic model of the business going forward.
Hey, Ryan Good morning. This is Marsans look I think we we are looking at a variety of different potential financing alternatives, we're not going to exclude and.
And in particular, one a were focused on.
Making sure that we've positioned the company for the current environment, but also for the future.
Balance sheet flexibility.
In terms of.
Structure and covenants ability to repay and things like that always so very important to us as were looking out it's not just about the cost.
So from a from a strategic perspective, that's kind of how we're thinking about.
Great and then just lastly regarding LIBOR floors can you say how much of a pershare benefit that had in the quarter and considering the modifications that you've done today that include a resetting of those over those floors. Do you have an estimate of what type of benefit you'd expect in the third and fourth quarter.
Look I think if you look at.
How our net interest income.
Performed in Q2.
You know the increase I would say is largely [noise].
Obviously, driven by LIBOR floors on it and on the asset side on a d. and a decrease in interest expense.
You know that quarter over quarter that was about nine cents nine cents per share.
So.
Yeah, that's that's going to Howard or we're looking at it. It's it's hard to say in terms of what happens in Q3 in Q4 I think we.
We're not focused on.
Really giving up the LIBOR floor economics as Steve mentioned in terms of highway amending our our loans.
So we feel pretty good about our portfolio, where it is right now in terms of I in terms of the fundamental generation of interest income.
Got it thanks for taking the questions everyone.
Thank you.
No again, if you'd like to ask that question. Please press Star then one.
Our next question comes from Doug Pardon me.
[laughter]. Please go ahead.
Hey, guys is actually Josh bolting on for Doug I'm. Most of my question, there been answered, but hey.
Just thinking about repayments in the back half of the year. Obviously, some strong repayments already are you expecting any sort of refinery demand or you know borrowers looking to refile, just given where LIBOR floors are in the portfolio versus where current rates are or how are you.
How are you thinking about repayments overall in that context. Thanks.
Good morning, this is Steve plus.
HM.
We are seeing.
And notable pickup and Rifai activity.
I think a fair amount than it is actually.
Related to the progress of the business plans as much as anything.
And I can't speak to the mindset, the borrowers or where they are financing, but I can just say that.
We're getting fair activity in that regard nothing like that I would say nothing like what our regular way expectation of refinancing it but it's definitely picked up.
Great. Thanks, Terry Thanks for that.
Thank you.
Your next question comes in.
Rick chain with JP Morgan. Please go ahead.
Hey, guys. Good morning, then thanks for taking my questions today.
First you first question on the loan sales this quarter you talked about a 9 million dollar realized loss on its unclear to me if that's gross or net or any potential reserve release associated with that so I'm wondering if there's an offset.
Eric its marks and good morning. Thank you for thank you for joining us.
There, maybe a little bit of an offset a in there we haven't we haven't finalized all the numbers assets an approximate number.
Obviously, there are some reserves.
Got it okay. Thank you, but but no no unusually large reserves associated with that long pretty much in line with the portfolio.
<unk>.
Okay. Great. Thank you next question and you had a question at the beginning the call a related Q3 hundred 58 million dollar repayment or I am curious specifically if this is associated with the retail loan in California, and the right.
Can I ask is that that was alone that originally had immaturity of two years, it's your largest alone.
And it has a at least reached a original maturity and I'm curious, if that's where we're seeing the repayment.
On pay rate could Steve no no it's not that loan.
We we did see another retail loan payoff, but not not that one and weve, particularly obscene ice what Steve mentioned earlier about just the.
Maturation a business plan. So you know we're seeing a multifamily another property type office. It's just they did the natural evolution that some of these loans were.
Very far along borrowers in the market for sales and refined and now that or the market coming back you're seeing people you know kind of continue those processes that it wasnt not that long.
Got it okay, and that's that's great and in its helpful. We were we were sitting here going through the permutations and combinations trying to figure out how to get to 150 looking at the the portfolio.
Okay and.
You know he brings me sort its my last question, which is that it. This cooling do you guys have a readily available what percentage of loans have reached a regional maturity and when he extensions what the remaining mature.
It is on the loan those loans would be a we just want to start to sort of monitor potential maturity defaults.
Sure.
So we.
We've had no loans come up yet that are on final maturity of the bulk of our loans or in the initial maturity or just now coming up.
On slide on and on then there's a maturity date its part of the amendments that I referenced we have done a few amendment, particularly where borrowers are stepping up and putting in new equity.
And let's say they have a extension data coming up in November December January.
And they are not likely to meet the debt yield test.
Some of them said to us.
And if they would like in a way to kind of you know meet the extension and what we've typically been doing is requiring a pay downs I will say look if you don't meet the extension tests in lieu of that paid alone now.
And a number of borrowers have have Ah I wanted to do that but I think it's a little early you know to to directly answer your question, but you know the theme. So far is good conversation strong sponsors sponsors stepping up with new equity.
And a willing to pay down loans to meet the extension.
Right. Okay look I think it in the unusual circumstances that were in sort of this temporal buffers make a lot of sense. Because this is such an unusual then we're experiencing.
We agree and that's why we're pursuing the strategy of working with our good sponsors to.
Give something you get something to work through the period of time.
And there is no he.
The take away there is to give is going to largely be time and they yeah, it's going to be additional capital into the works Oh some form that's right.
Terrific. Thank you guys very much.
Thank you for your questions. We appreciate.
This concludes our question and answer session and would like to turn the conference back I mean, as Jack tailored for any closing remarks.
Thank you. We appreciate you all joining us today and are taking the time to.
Be with us and to follow up on our quarter. These are very very challenging times. We're we're delighted to here that our analyst community friends and family and investors are well.
And we look forward to speaking with you again soon and to give you further up it reports and how we're doing and we wish everybody good health and safety through this period of time. Thank you very much and thank you operator, we appreciate.
Thank you. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.