Q1 2021 Navient Corp Earnings Call

Good day, and thank you for standing by and what comes to the Afghan for first quarter, two charge and central one earnings call.

All participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

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I would now like turn the conference over to your.

Speakers for today Nathan Rutledge. Please go ahead.

Thanks, Mary Good morning, and welcome to Navient first quarter 2021 earnings call with me today are Jack Remondi, our CEO and Joe Fisher our CFO.

After their prepared remarks, we will open up the call for questions before we begin keep in mind, our discussions will contain predictions expectations forward looking statements and other information and better business that is based on management's current expectations as of the date of this presentation actual results and the future Navy and materially different from those.

Disclosed here discussed here this could be due to a variety of factors, including among other things uncertainties associated with the severity magnitude and duration of the COVID-19 pandemic and the related economic impact as reported previously for work from home policies and travel restrictions that have been.

And put in place and have not negatively affected our ability to close their books and maintain our financial reporting systems.

Internal controls over financial reporting or disclosure controls and procedures.

Listeners should refer to the discussion of those factors on the Companys form 10-K, and other SEC filings with the SEC.

During this conference call, we will refer to non-GAAP financial measures, including core earnings adjusted tangible equity ratio and various other non-GAAP financial measures drive some core earnings our GAAP results and description of our non-GAAP financial measures and with a reconciliation to GAAP can be found in the first quarter 2021.

And supplemental earnings disclosure. This is posted on the Investor page at Navient Dot com.

Thank you and now I'll turn over the call to Jack.

Thank you Nathan and good morning, everyone and thank you for joining us today and thank you for your interest and Navient.

Our results this quarter were exceptional and in fact, they were a record high for a quarter.

They are the result of our continued ability to adapt to the changing economic environment and the changing needs of our customers and clients.

Our operational agility has been a long term source of strength for Navient, but never has it been more apparent than during the pandemic.

As a result of our ability to adapt and respond and we were able to provide relief to student loan borrowers and need assist others and securing lower cost loans.

And respond to clients with systems and people to address their rapidly growing and changing needs and we opportunistically captured the benefits of this low interest rate environment and strong investor appetite for quality assets.

The benefits. This quarter include historically low delinquency rates and both are felt and private loan portfolio.

Strong net interest margins as we continued to execute on several lower cost funding transactions.

Increased bps revenue as we met our clients' changing needs and.

And two loan portfolio sales that accelerated cash flow and earnings with combined gains and related reserve release of $191 million.

And total we earned $304 5 million and coordinate income and delivered adjusted core earnings of $1 71 per share and increase of 235% over the year ago quarter.

This quarter, we sold $560 million and legacy private education loans, and the residual for them a $1 billion securitized refi loan portfolio.

Both sales produced gains driven by lower discount rates unexpected future cash flows and expectations for strong credit performance.

Both highlight the value of our legacy and refi loan portfolios and the benefits are servicing brings to these portfolios.

Demand for longer duration fixed income investments led investors to increase their evaluation of private loan portfolios given the strong credit performance and steady cash flows generated by the loans.

Well, we don't intend to be and make and sell originator and strong investor demand made this and attractive time to sell.

And it clearly demonstrates the value we create when we originate new refi loans.

Even with the current interest holiday on government owned federal loans and the calls for broad based loan forgiveness. We saw solid demand from graduates looking to lock in today's low interest rates.

And interest expense by refinancing their student loans.

One noticeable change we see is a higher portion of the loans refinance our private loans.

We see continued opportunity to help people save thousands and interest expense and further opportunity to expand the share of private loans being refinanced.

I'm also optimistic of our ability to grow our in school lending business as the vaccines are more widely delivered we expect the upcoming school year to return to a more traditional experience with more typical demand for responsible and transparent and education financing solutions.

Combined we are reconfirming, our projections for at least five $5 billion and new loan originations in 2020 one.

And our bps segment, we're pleased to be able to respond quickly and in size to our state clients need.

We leveraged our adaptable technology platforms, so our teammates could provide much needed support.

And processing unemployment claims, providing contact tracing and assistance and.

More recently resources to help accelerate vaccinations.

While we were happy to continue to provide this critical assistance, we do hope the need for these services will decrease as the pandemic subsides.

Our.

And to adapt our systems and operations to hire thousands of new remote employees and contractors and respond with active assistance often within just a few days has been a great demonstration of the value we bring to our clients.

As the COVID-19 project work begins to wind down we are focused on leveraging our proven experience capabilities and flexibility to deliver value and innovation to longer term solutions.

And our consumer lending business a year ago, we like many other lenders increased our loan loss reserves and the face of significant economic uncertainty and rapidly rising unemployment.

As the economy regained its footing many consumers were able to manage their loans, including their student loans and in fact, the challenges created by the pandemic further demonstrated the value of a college education. As this segment of the population was more likely to be able to work remotely.

They'll credit performance to date is clearly outperformed our original expectations with the economic outlook still uncertain, we have maintained our strong level of reserves.

Our ongoing efforts to improve profitability contributed to our positive results this quarter.

And traditionally this means a focus on operating expense and Navient and this also includes a strong focus on reducing interest expense.

We completed several new financings this quarter that achieve our lower cost objectives, and we've continued to reduce the balances of our most expensive debt our corporate unsecured notes.

Operating expense initiatives include enhanced web tools and ongoing automation efforts that both improve the customer experience and increase operating efficiency.

We're also reviewing our space needs and have recently exited a lease and one of our more expensive offices.

Our efforts to improve both operating and funding efficiency will continue.

The implementation of Cecil and the subsequent decline in interest rates impacted our targeted capital ratios earlier this year.

I'm happy to report that with our strong financial performance over several quarters and the expected reversal of some of the derivative marks we exceeded our target and.

Adjusted tangible equity ratio at March 31st.

As a result, with the acceleration of earnings and release of capital from the loan sales.

We will also accelerate our return of capital by increasing our planned share repurchases in 2020 one.

$200 million to $600 million for the full year.

Finally, I remain optimistic about our outlook for the rest of 2021, our portfolio performance remained strong our loan origination and fee revenue forecasts are intact and our earnings outlook is well ahead of plan and.

And we are well on our path to deliver our fourth year of year over year growth.

Before I turn the call over to Joe I want to thank my colleagues our results this quarter other product for their efforts and commitment to serve our customers and clients.

Thank you for listening and I'll now turn the call over to Joe for more detail on this quarter's results.

Thank you Jack and thank you to everyone on today's call for your interest and Navient.

During my prepared remarks, I will review the first quarter results for 2020 one.

And we'll be referencing the earnings call presentation, which can be found on the company's website and the investor section.

Our first quarter results compared to our original outlook for 2020, one as provided on slide four.

We are off to a great start to 2021 as we are currently on pace to exceed all of our original targets provided at the beginning of the year.

This quarter's results reflect the continued dedication from team navient to meet the challenges and needs of our customers.

As a result of the strong first quarter and updated outlook. We are increasing the range of our original 2021 adjusted core earnings per share guidance by over 30% to a range of $4.15.

To $4.25, our outlook excludes regulatory and restructuring costs.

Flex a favorable interest rate environment and includes a 50% increase and planned full year share repurchases in 2020, one by utilizing the remaining share repurchase authority of $500 million.

Key highlights from the quarter beginning on slide five include GAAP EPS of $2 and adjusted core EPS of a dollar and 71 cents.

Lower delinquencies on both felt and private education loans.

Sold $1 $6 billion of private education loans that resulted in total gains on sale and release of provision of $191 million.

Originated $1 $7 billion of private education loans achieved bps EBITDA margin of 29% and the quarter strengthened our capital position and returned $129 million to shareholders and the form of repurchases and dividends.

Let's move to segment reporting beginning with federal education loans on slide six.

The net interest margin improved to 97 basis points, which led to overall net interest income increasing 9% to $144 million compared to the first quarter of last year.

Even as the average balance of loans declined by 9%.

The increase from the year ago quarter was driven by the favorable interest rate environment and ongoing improvement and funding costs.

Felt borrowers transition back to repayment total delinquency rates have declined 21% from the previous year to $3 $8 billion.

Fee income and operating expenses and this segment declined primarily as a result of the expected decreases and asset recovery volume.

Impact of COVID-19 on certain operational activities and improvements and operating efficiencies.

Now, let's turn to slide seven and our consumer lending segment.

$180 million increase and net income was largely driven by the two loan sales that occurred in the quarter, which I will provide more color on and the following slide.

The net interest margin of 299 basis points was inline with expectations as the decline from the year ago quarter was largely driven by the increased percentage of our high quality private refi product within our consumer lending portfolio to nearly 40% of total loans.

The delinquency rate declined 36% to two 3% from a year ago and the charge off rate fell to 68 basis points.

As borrowers continue to transition out of forbearance, we feel confident that we are adequately reserved given the well seasoned and high credit quality of our portfolio.

At this time, we have not incorporated a significant change and our economic forecast as it relates to the allowance.

Though the trends we are seeing remained highly encouraging.

Excluding the provision release related to the loan sales the remaining provision of $15 million was primarily related to $1 $7 billion of newly originated education loans and the quarter.

Let's turn to slide eight which highlights our loans sales.

And the first quarter, we sold $1 $6 billion of private education loans, consisting of $560 million of non refi loans and $1 billion of newly originated refi loans.

The non refi loans were all originated prior to 2014.

These loans were primarily funded with unsecured debt and we hold 8% of capital on our non refi portfolio. The gain on sales from this portfolio totaled $46 million and resulted and the reversal of allowance for loan losses of $88 million.

The second loan transaction consisted of a residual sale related to $1 billion of newly originated refi loans, we hold 5% of capital against refi loans, given the high credit quality and the low default rates that continue to outperform expectations.

Gain on sale from this portfolio totaled $43 million and resulted in a reversal of allowance for loan losses of $14 million. The total gains associated with this transaction exceeded our last similar sales that occurred in 2019 and demonstrate the attractiveness of this asset class the.

The majority of the cash raised from these transactions will be used to reduce existing debt that was directly funding these loans, including unsecured debt and warehouse facilities.

The gains on sales from these transactions combined with the acceleration of future cash flows and release of capital allowed us to increase our planned share repurchases for the rest of 2020, one by $200 million, all while meeting our targeted capital thresholds.

Our updated guidance presented today does not include any future loan sales.

Let's continue to slide nine to review our business processing segment.

And the first quarter, we continued to expand on opportunities that leverage our existing technology and infrastructure.

This allowed us to achieve EBITDA margins of 29%, while more than doubling our total revenues to $125 million.

The $68 million increase is largely due to supporting states and providing unemployment benefits contact tracing and vaccine administration that we believe will begin to decline during the second quarter as the economy reopens and these contracts are set to expire.

The $37 million increase in expenses and the quarter associated with the growth and revenue and this segment contributed to increase total operating expenses for the company of $7 million from the year ago quarter. We.

We continue to focus on improving our operating efficiencies across all of our segments as our growth businesses contribute a larger proportion to our overall revenue and expense.

Let's turn to our financing and capital allocation activity that is highlighted on slide 10.

During the quarter, we repurchased $8 2 million shares at an average price of $12.23.

At today's share price, our planned share repurchases of $500 million for the remainder of the year would reduce our outstanding share count by nearly 20%.

In addition to the loan sales, we saw tremendous execution on the issuance of $2 $8 billion of term funded ABS and the quarter with 1 billion related to the residual sale.

For example, our felt issuance that price and February was over 30 basis points tighter than the previous transaction that price in the fourth quarter and was our largest felt transactions since 2017.

We continue to see increased demand for both our private and felt transactions.

Our issuance of $500 million of unsecured debt and the quarter marked our lowest coupon ever printed for navient unsecured debt.

On April 5th we retired $627 million of unsecured debt and have no remaining maturities for the rest of the year.

These transactions demonstrate our ability to lower our cost of funds, while managing our debt maturity profile to better align to the cash flow projections of our total education loan portfolio.

We ended the quarter with and adjusted tangible equity ratio of six 2%, which was in line with our updated forecast.

The cumulative negative mark to market losses related to derivative accounting declined by 19% to $499 million and the quarter due to the increase and projected rates and the natural passage of time, excluding these temporary mark to market losses, which will reverse to zero as contracts mature and our adjusted tangible.

<unk> ratio is eight 1%.

Turning to GAAP results on Slide 11, we recorded first quarter GAAP net income of $370 million for $2 per share compared with a net loss of $106 million or <unk> 53 per share and the first quarter of 2020.

In summary, the outperformance across all of our segments highlighted by our financing activity and growth businesses position us well to exceed our original targets strengthen capital and increase returns to shareholders.

I'll now open the call for questions.

Yes.

Quick question, you will need your price it's Tom.

Okay.

Can you do all your question.

Standby, while we compile the Q&A and Boston.

Our first question comes from the line of some day.

And with P D doubled your line.

And as open.

Thanks, and good morning.

Wanted to start off with the loan sales.

And I was just wondering what factors sort of led to your decision on the sale and then Joe I think I heard you say that youre not assuming any additional sales for the rest of the year. Maybe you can just talk about the thought process on future sales.

Sure I think there's just a has been and incredible demand for our asset class over the last several months and actually last several quarters and just as a result of that demand. We took a look at our portfolio and given the current interest rate environment and the attractiveness of this asset class we felt it was appropriate to.

Advantage of this opportunity and as we've done in the past we've been opportunistic I'd mentioned that 2019 loan sales. We've also sold loans prior to that on both the felt and private side, but really felt that this was a great opportunity here that presented itself to demonstrate the value not only of our law.

C portfolio, but also the value of the refi portfolio and the new originations and so when we provided guidance today are our updated guidance, we're not forecasting any future loan sales as we do not believe that is our strategy of a make and sell model, but we will be opportunistic as we have in the past.

And I would say that one thing to take into account with our updated guidance that reflects the loss of these loans for the remaining nine months of the year in terms of that earnings. So this really is a great quarter that we saw and I think it's going to lead to a great year based off of the early trends for the first call it for months here.

And.

Absolutely.

And then I guess maybe.

Maybe Jack.

And maybe you can just talk about.

Theres anything on the regulatory or political front that you're watching closely I know you testified before the Senate Committee couple of weeks ago, just maybe any thoughts from that as well.

Yeah, I think on the on the regulatory side of the equation I think the bad environment has been relatively stable in terms of no new developments, we continue to be eager to bring the outstanding items to resolution.

And that we've had now for a number of years.

And you know as we've said in the past the facts and circumstances that have come out of the discovery process there.

And make it very clear that the work we do is in full compliance with the with the loan programs and and consumer laws.

On the political.

<unk> side of the equation you know, there's just there's been a tremendous amount of of a disc.

A discussion and talk about student debt and the challenges it presents to some some borrowers you know I think the proposals that we've seen have been proposals that are broad based meaning everyone gets loan forgiveness of some depending on the size.

We've talked about that as being I'm, probably not the ideal solution for a couple of reasons. One is it doesn't address tomorrow's borrowers and any way shape or form.

And two it really is providing a fairly significant benefit at a debt of super high cost to taxpayers.

Indiscriminately right, it's not it's not targeting the relief to those who need it most and providing it to many who have received the value of their education and.

And you you mentioned that I testified and that and that testimony I mentioned that half a million borrowers each year that we service pay off their loans and fall.

We're reporting today delinquency rates and in the felt and private loan portfolios that are at or near historic lows.

This is not.

This is clearly not a and asset class where the majority of borrowers are struggling there certainly are problems here, we know where they exist with shared that detail and and hope that we can provide some assistance.

The policymakers as they try to address some of the concerns here.

Okay, great. Thanks.

Yeah.

Yeah.

Our next question comes from the line up for Rick.

With J P. Morgan your line is open.

Good morning, guys and thanks for taking my question.

Look I'd like to.

Delta and a little bit deeper on the business processing segment.

You know you guys highlight the.

Scalability of the model in terms of profitability I think what's equally interesting is actually the practical scalability that you were able to.

Increase the throughput so much and <unk>.

Actually and be able to address that operationally.

You talk about.

About some of the tolling and some of these contracts.

Can help us sort of understand what might happen in terms of revenue pressure both on the government services.

And on the RCM side that would be really helpful.

I'm curious, particularly if the RCM revenues are.

Going to pay for that same downward pressure.

Sure. So I think you're absolutely right I mean, one of the things that we have talked about is the agility and the adaptability of both our people and our systems and.

And the last year.

Our ability to move people to a work from home status quickly was certainly beneficial to the health and safety, but it also allowed us to scale up.

The number of folks that we had and could offer to states to address these rapidly rising needs of unemployment insurance processing and and.

COVID-19 contact tracing and et cetera work that we did a we've hired thousands of employees and contractors over this timeframe to address this and all of them had to have been well trained virtually all of them are working remotely.

And all of them are connecting into the systems that we've been able to adapt to be able to address whatever the unique needs are and this and this particular space and we're doing it and I think a tremendous efficiency.

Efficiency and performance levels for our clients one state reported to us that our unemployment insurance processing team was operating at a 30% higher efficiency rate and all their other contractors.

And the work, we're doing on and on the vaccine distribution involved a.

Targeted outreach effort to hard to reach segments of the population to encourage them to sign up for vaccinations that state now leads the country and and and vaccination rates. So that's the type of work, we've been able to do and and you know we're super excited to be able to do it.

That revenue shows up and both government services and and health care RCM, So the COVID-19 related debt.

<unk> work and the contact tracing workers and RCM for example, and and the unemployment is and and the government services segment, we expect that revenue to probably start to decline.

In the second quarter, we would estimate that it would decline by about a third as.

As we move.

Net that specialty work as as we move into Q2 and.

And eventually most of it will will go away.

But I think what we've been able to demonstrate to the states is.

The quality and capability of the services that we can bring to the table and many of them are talking to us about opportunities that would be more permanent in nature versus a project related work here and then the last thing I would just add Rick is that a bunch of our work and the and then the traditional work we have.

John and V P S.

Was.

Significantly impacted by the pandemic, there's a lot of it is transportation related or.

Revenue cycle management at hospitals that volume declined dramatically as people traveled last did fewer transactions.

And even at hospitals.

The inpatient and outpatient services declined rapidly unless it was COVID-19 related and so that is just now starting to come back and.

None of them are at 100% of pre pandemic levels, yet, but they're slowly inching their way back there so.

As the COVID-19 project, where it comes down and we will see some of the core processing work that we've done also began to rebuild here.

Great. Thank you for answering that question, specifically and if I can ask one follow up you talked about.

The potential change Delta on the revenue side help us understand how much of the operating expenses are variable.

If revenues are down and third over time, how much of that operating expense will how much will the operating expense declined as well.

So most of the work that this is a heavy les.

Labor component of it and.

Most of those are housed.

And as a people that have been hired had been hired on a temporary basis. So.

We'd be able to move that work and move that cost if the revenue were to decline.

Great very helpful. Thank you very much.

Our next question comes from the line of John.

Your line is open.

Thanks for the.

And what's the thought process of loan sales how do you do.

Go through that thinking about that relative to.

The present value of the for.

Residual cash flows.

Seated with those loans versus.

The gain on sale or you exceeding that and I'm, assuming that you're doing some sort of analysis whenever you're looking at those loans sales.

And I would say Aaron and thanks for the question is that when you look at the discount rates that were applied here just speaking more towards the whole loan sales and certainly a much better outcome than what you and and other analysts are modeling from a discount rate perspective on the private portfolio. So.

That just speaks to the environment that we're in and the attractiveness of these assets that have talked about being all originated before 2014, but 99% of them were originated before 2010. So these assets have been.

Outstanding are very well seasoned at this point and time and as we look at it versus our own projections.

We felt that this was the appropriate time to just demonstrate to the marketplace based on the bids that we were receiving the value that we believe were not getting in the share price. So I think if you look at your models and as other analysts updated with similar assumptions you should that should lead to an intrinsic value far higher than what.

We're trading at today.

Got it thanks, and then on and then I think higher or and just just to add to that and the ability to take those gains and.

And.

Is it basically and acceleration of earnings that we would have generated and future and use them to buy back shares that are not reflecting those values today.

It is really what gets you to the decision to sell.

Got it.

Thanks, Jack and then the.

Net higher share repurchase amount with 500 million.

It's more than what you did and the first quarter or do you need to go through some sort of an accelerated program to.

He bad or do you think you can achieve that through just your regular share repurchase program.

I think we can achieve that through our regular share repurchase program I would say that certainly at these levels, we'll look to accelerate and some of that into the second quarter. So for for your modeling purposes, I would weighted a little heavier in the second quarter, but we can do that through normal share repurchase activity.

Great. Thank you.

Our next question comes from the line of Marsh Orenbuch with Credit Suisse. Your line is open.

Great. Thanks, and following up on a couple of those other questions.

How do you if.

If you kind of looked at the rest of the portfolio and said, how many others how much other and assets could make that trade effective and.

And you think about those types of gains and more and <unk>.

<unk> prices to a day.

How much of the.

Adjusted book is.

It's in a position where you could it would be accretive to do that.

And so and what I think about the rest of the portfolio and I touched upon this during our last quarter call is that we were exploring other alternative ways to in terms of financing so that and included loan sales, but also different facilities that we've put in place over the years. So there are advantages both and what we've done.

And from the debt.

We call it the turbo repo facilities as well as loans sales, where we can advance call. It cash flows in future periods to today to take advantage of the share price. So this is not just.

I'd say one item on the table. There is many things that we look at two and it would take advantage of the share price, which we've done over the last few years and.

And I would say that this was an option that today, what was very attractive and and so we moved quickly to take advantage of that but we have other options on the table within our residuals as well as whole loans and specifically to your question.

On our non refi portfolio, that's unencumbered, we have a little less than $2 billion of of those similar types of assets.

Thanks and.

Jack You had said you know we're not.

Becoming and they could sell company.

On the refi loans could you talk about whether you know what.

Was there something unique about that particular residual that made it better and worse.

More scalable for us there.

And what would be the economics, if you were to kind of go to that.

Model and she said come out today.

I think as Joe mentioned Moshe as you know, we've got and Investor marketplace. Here that are that is utilizing today's low interest rates as the you know the <unk>.

As for discounting future cash flows and.

And the car and credit performance of the portfolio being.

And as such and exceptionally strong position.

And just ended up with a pretty attractive deal and and I think and more so and the refi side of the equation and then in the legacy component. This this was really an ability for us to demonstrate to the investor community the value of our origination franchise and that space.

Based on the types of gains that are available.

But it's not we still continue to believe that we are better off owning these loans given the ability to finance them with with a 5% and capital level and the securitization.

And rates that we were able to obtain in the marketplace I think it would be a little bit different if we were a bank and and had a different capital structure.

Required on this asset class.

Great. Thank you very much.

Again, if you would like to ask a question press star one on your telephone.

Our next question comes from the line of LMR, Steven Hoist with all States. Your line is open.

Hi, Thank you for the call. This morning, I'm just wondering if you could provide a little bit more and details around the project and run off for the department of education contract asset recovery services.

Correct me, if I'm wrong, I thought that was supposed to and kind of.

At the start of 2020, two and then revenues and just kind of decline I guess somewhat substantially quarter over quarter.

Yeah. So we had two contracts with the department of Ed and one was on a and asset recovery basis that contract has ended and the revenue associated with that as a.

Has run off at this stage and the game. We also have a contract where we service loans for the department of bad and that is and ongoing contract. It has an expiration date at the.

And that comes up towards at the end of this year, but.

But we expect the department.

For the loans need to be serviced somewhere and so we're working with the department and expect them to announce what their plans will be for that portfolio across all of <unk>.

Sometime later this year.

Okay, and a contract and that contract I'm, sorry that was I was just going to add you asked I think the dollar size of that contract runs about and it's about $145 million a year and total.

Okay.

Thank you.

And.

And then just on the charge offs, obviously, those I guess this quarter were lower and then.

What you projected kind of for FY 'twenty, one and total I mean are you still kind of standing by your FY 'twenty one outlook in terms of charge offs or shall we maybe guide towards something.

And lower level, just given first quarter performance.

So we're not providing updated guidance, but we're certainly on pace and a trajectory to be below what the targets that we originally set out at the beginning of the year.

Okay and then last question for me you guided toward a five and a half billion anything total originations for the year are you able to provide any color regarding kind of what next and that would be from the in school segment versus maybe the refi product.

And we haven't broken that out and.

You know I think it is so we're still looking at that combination of $5 $5 billion and total and I think it was important to reconfirm that just given some of the commentary I think you've seen from other consumer lenders of.

Reduced demand for <unk> for new loans, we standby, our our original forecast share of $5 5 billion.

Okay. Thank you.

Thank you.

Our next question comes from the line of Peter Troisi of Barclays. Your line is open.

Hey, good morning, Joey just on the on the loan sales you mentioned.

Principal proceeds from the non refi private loans will be used to reduce unsecured debt.

And it seems like there's about $560 million of cash that you've earmarked for for that debt reduction.

Can you give us a sense for how much of that you might use to retire the unsecured bonds versus repaying the warehouse borrowing that you mentioned.

Sure. So on April 5th we reduced all of the maturities to zero for 2021 through the repurchase of $627 million that was due in July I would say that in terms of the warehouse facility reduction and that's primarily related to the the.

Refi sale, but on the whole loan transaction there was about.

Call. It just a little south of $200 million that was related to a.

A turbo facility and that transaction, so youre left with roughly 400 million to address the unsecured debt.

Okay. That's helpful. Thank you.

There are no further questions at this time now and turn the call back over to Nathan.

Thanks Mary.

We'd like to thank everyone for joining us today's call.

Please contact me if you have any other questions or follow up questions. This concludes today's call.

That concludes today's conference call. Thank you for participating you may now disconnect.

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