Q4 2022 Rithm Capital Corp Earnings Call

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Speaker 5: Good day and welcome to the rhythm capital fourth quarter and full year 2022 earnings conference call.

Speaker 6: All participants will be in a listen only mode

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Speaker 8: After today's presentation, there will be an opportunity to ask questions.

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Speaker 10: Please note, this event is being recorded. I would now like to turn the conference over to Phil Simmons. Please go ahead.

Speaker 11: Thank you and good morning everyone. I'd like to thank you for joining us today for Rhythm Capital's fourth quarter and full year 2022 earnings call. Joining me today are Michael Nierenberg, Chairman, CEO and President of Rhythm Capital and Nick Santoro, Chief Financial Officer of Rhythm Capital. Throughout the call we are going to reference the earnings supplement that was posted to the Rhythm Capital website.

Speaker 12: forward-looking statements and review the risk factors contained in our annual and quarterly reports filed with the SEC. In addition, we will be discussing some non- GAAP financial measures during today's call. Reconciliation of these measures to the most directly comparable GAAP measures can be found in our earnings supplement. And with that, I will turn the call over to Michael.

Speaker 13: Thanks, Phil. Good morning, everyone, and thanks for dialing in. 2022 was a transformational year for us in many ways.

Speaker 14: First on the markets, our broad experience in financial services investing served our shareholders well as we navigated some of the more difficult fixed income markets we've seen in a few years. We're focus our investment interest and focus on join is catching up with the shareholders and the planners for the markets, talking ultra

Speaker 15: with the Federal Reserve raising rates seven times for a total of 425 basis points, the mortgage basis widening between 70 and 100 basis points.

Speaker 16: high yield index wider by almost 200 basis points, and investment grade bond spreads wider by at least 25 basis points.

Speaker 17: Capital markets essentially shut down during different periods. We managed to grow our book value by 5% during 2022, generate a gap return on equity of 15%, 11% on our core business, and an economic return of 14%. This doesn't happen by chance.

Speaker 18: With a disciplined approach to investing, spending time with our partners, positioning the company in our balance sheet for higher rates, we generated a very good result during these difficult times. Unfortunately, the equity does not reflect the performance with the stock price trading at too large of a discount, in my opinion, to Book and we'll continue to do all we can to see us normalize towards Book.

Speaker 19: During the year, in June , the company rebranded to Rhythm Capital as the management contract was internalized. The results of these actions were to drive more earnings to our shareholders and begin the transition to an alternative asset manager.

Speaker 20: In the fourth quarter of 2022, we launched our private funds business with the intent of raising third-party funds.

Speaker 21: Our funds business will be a subsidiary of rhythm capital with all management fees and performance fees flowing through the parent. This will enable us to generate more earnings for our shareholders and ensure we are aligned with our shareholders and our employees.

Speaker 22: We are currently marketing a financial services fund and look forward to working with partners to take advantage of the wonderful opportunities we are seeing and expect to see in 23 and beyond.

Speaker 23: We will also be opening Rhythm Europe . Very excited about this. This will enable us to take advantage of dislocations in the EU and UK. This should happen in Q2 and I'm very excited about the what if here.

Speaker 24: In December of 2022, we acquired a 50% stake in the private equity commercial real estate platform, formerly known as Normandy Partners.

Speaker 25: and renamed as Green. This gives us real depth and expertise in conjunction with our rhythm of plays to be opportunistic investors in the commercial real estate space, both on the debt and equity side. Regarding our operating business units, we right-sized our mortgage company, our G&A overall in the company, by over 50%.

Speaker 26: year on year. We are now in the position to drive higher earnings as a result of the actions taken. Our MSR Portfolios, which totaled $600 billion, have been fantastic, generating tons of cash flows into the higher rate markets we've seen. We've been very vocal. We will not fight the Fed.

Speaker 27: and at this point we will continue not to fight the Fed. Our average gross WAC on our portfolio is 3.7% and that includes new production. We continue to explore different ways to engage our customer base of 3.1 million consumers by offering other products and are very focused on our customer retention.

Speaker 28: As you think about the housing and mortgage market, the weighted average mortgage rate for Fannie Mae and Freddie Mac loans in the United States is 3.62%.

Speaker 29: The weighted average mortgage rate for Ginnymay borers is 3.57%. I bring this up as the ReFy opportunities way out of the money with mortgage rates currently north of 6%. This should continue to lead to great performance in the MSR sector.

Speaker 30: Our Genesis business, which is our builder business, at a great year, originating a little shy of 2.5 billion in loans. Average coupons on that portfolio right now are approximately 10% and we look forward to growing the business in 23 and beyond.

Speaker 31: In the single-family rental space, our door business had a good year as our occupancy rates continued to, or as our lease-up rates continued to increase. A couple things there, one is we've halted our acquisition very early in the year with the expectation that home prices would decline and cap rates would increase.

Speaker 32: We are seeing that, however, transactions have been very slow. As we go forward in 2023, and with home prices at this point down approximately 10% from peak, we think that housing supply shortages, home prices being less affordable where mortgage rates are, will be back acquiring units at some point later in the year.

As you can tell, a lot to do here. I'm super excited for our future and super excited for the growth prospects for our business.

With opportunities in the market across many asset classes and companies, we look forward to putting up great returns for shareholders and our partners in the private credit business. I'll now refer to the supplement which we posted online and I'm going to open up on page 3.

There are a couple things here. On the rhythm side currently 70 full-time employees here in the offices in New York, balance sheet is approximately 32 billion as of the end of the year, a little under 7 billion of total equity. When you look at the portfolio of operating companies, keep in mind.

This business was started in 2013 to be an asset manager of XSMSRs. Today, if you look across the board, we have a number of different operating companies in financial services, whether it be on the residential side, the commercial side, making loans to builders. We have property preservation businesses. We have a single-family rental business. We have title and appraisal. We're very, very proud about the company.

of the work that the team has done to build out these operating companies, which in all times is not the easiest place to be. Financial highlights page four, get that income, 81.8 million or 17 cents per diluted share, earnings available for distribution.

33 cents per diluted share or $156.9 million. Our dividend is 25 cents. Cash and liquidity at the end of the year was $1.4 billion. Today is $1.3 billion. That includes all the payments made to Fortress. Total equity $6.9 billion. That's for Q4. Full year gap net income $864.8 million.

or $1.80 per diluted share. Earnings available for distribution, $633 million or $1.31 per diluted share. Total economic return 14%. Gap return in equity 15%.

earnings available for distribution, return an equity 11, and book value growth 5% ended the year at $12. Book value right now will probably be something between 11 and 3-quarters Dw ????? 11 Rudd Axe eleven chargers in 12.

Page 5, business highlights, internalize the manager, rebranded to Rhythm Capital, long-star private credit business, about 50% of the operating entity of Greenborne, and then we successfully right-sized our mortgage company. Very, very good year. A lot of work, a lot of hard work by the team across the board.

Page 6, the Evolution Arrhythm, again started in 2013 as a manager or to acquire excess MS sore rights as we progress through the past 10 years. We drove growth through many different business lines, including becoming operators of different business lines.

A lot of what I would call large scale M&A where we bought caliber for example in 2021 for book value that was a billion six we bought Genesis capital in 2021 that was a billion four.

Everything we do when we think about acquiring assets and or companies is around trying to acquire these assets at book value with a view towards real value in the underlying assets in the event that, for example, in the caliber of business we see rates go up and the origination side go down.

As we go forward, 2023 and beyond, the growth of our private funds business, we've been running around the globe a little bit meeting with different LPs and look forward to really developing the private credit business.

as we think is going to give us the opportunity to deploy capital more opportunistically when those situations arise. Page 7, rhythm 2.0, operating companies I pointed out on the left side, investment portfolio, no surprise what we have going on there, plus our private capital business.

I think it puts us in a very, very good place and again really excited about what the future looks like for our business.

Page 8, the economic landscape. This year is going to be hard. I mean, the rate market is going to be a little bit more challenging than I think what we saw in 2022. 2022 is very clear. The Fed was going to keep their foot on the pedal and raise rates extremely aggressively. We saw, as I pointed out, Fed funds rise by 400.

plus basis points, bond yields back up, and we position the company extremely well going into that. As we look at this year, the yield curve continues to remain inverted. Big employment print on Friday. The consumer seems like they are in very good shape, and I think you are going to see a fair amount more volatility in the rate market this year.

And where we are now is much closer to home than I think where we were a year ago and will continue to monitor rate moves and at some point likely put on some mortgages and hedge out some of our MSR port folios.

Page 9, the rhythm playbook. Again, some of this is a little repetitive. The investment portfolio, we're going to continue to seek opportunities to deploy capital, not just to deploy capital, but they must be at good risk adjusted returns.

monitor the credit performance of the existing portfolio, what happens if we go into recession, how do we think about our business and make sure that we're ready for that. Servicing and origination, the hard work that Baron and his team did in 22, this is in a very different place I think as we enter 23, to be able to grow that business again.

from an employee standpoint, we are right sized right now and look forward to growing our business throughout the course of the year. Private capital business, again, really excited, gonna be a lot of hard work there and look forward to really growing a proper funds business. Genesis capital on the building side.

We're going to grow that business. We love 10% on leveraged yielding assets on our balance sheet. Adore, the single family business, again, will enter the market when we deem it appropriate with higher cap rates and when we think HPA or HPD is kind of leveled off. And then on the commercial real estate side, we're going to be more opportunistic as we think it.

We've been involved in what I would call distress death situations even buying the assets from Ditec at a bankruptcy. So a lot of experience and a great team that's in the office every day working their sales off to put up very good results for our shareholders. The mortgage company overview page 12.

You know, for the fourth quarter, 24 million in pre-tax income. What I would caution everybody as you look at these numbers, make sure if you compare us or other organizations to us, make sure you look at everything apples to apples, mix and tour a CFO .

and Baron are happy to walk you through any of the meths and then around that. Year over year, decline in GNA down 53%. Unfortunately, with rates rising, headcount reductions were very aggressive for us in 22. Hopefully we're done with that as we go forward. There are some interesting opportunities in the mortgage space around MSRs and other potential in.

We have 500 billion that we currently service in-house. That doesn't include assets that we service with third parties either on the rhythm side or in some of the legacy mortgage company stuff that we have on the excess side. As you can see, gain on sale margins, Q4, 1.81%. Big focus is on us. We've right-sized our retail organization. It's going to be driven real—

Now, in light of our expectations that home prices continue to come down a little bit to lower LTVs, which may make us a little bit less competitive in what I was talking about some of the higher risk products, which were more than happy to be able to take these actions.

Page 14, the MSR portfolio, $600 billion, 3.7 gross WAC. On the excess side, 4.4. On the excess side, those are legacy credit impaired MSRs. Love where we sit here. A lot of cash flow. So speaking of cash flow, I'm Aaron

As I pointed out before with 40 trace well north of 6%, we expect out those portfolios to perform extremely well as we go forward. MTR values, we took them down a little bit in the fourth quarter. The weighted average multiple is 4.9.

We think that's a little bit on the conservative side. As you can see to the right side of the slide here, amortization is dropped from 4th quarter of 2020, from 30 CPR down to 5 CPR on the 4th quarter of 2022. Service Head Vance is nothing to talk about here. We continue to monitor.

performance on the underlying homeowner. Effectively year-over-year, everything's unchanged. Should we see a material pick up into the link with these end-order unique to quite the service of the advances? Our capital market seemed led by Sanjeev Khan has done a great job.

not only now but over the years, having plenty of capacity in that space, just to frame something going back, I think it was to like 14 or 15, we had 11 billion of capacity in the service or advanced business. And as you look at this, there's really not much going on there. Genesis Capital

I pointed out before, a little under $2.5 billion of origination. Love the business, love the coupons, tightened up underwriting guidelines, and we expect some really good growth here as we go forward through 23 and beyond. And then finally, on the single-family rental space, 3,700 units. We are small in what I would call a sea of big fish.

To the extent that we see cap rates at attractive levels and we are able to grow that business when we think home prices have leveled off, we will do so. We're not seeing a ton of opportunities there now and our main focus continues to be on really getting assets released. We're seeing a lot of different lease rates that give or take about 96% rate.

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At this time, we will pause momentarily to assemble our roster. The first question today comes from both George with KVW. Here's go ahead. I'm going to ask you just about the potential cadence for growth in alternative assets and

There's obviously a lot of chatter in the MSR market about Wells potentially selling, et cetera. I mean, is there a potential for something meaningful kind of happening in that area? So, good morning both. Yeah, on the private capital business, when you look at where our equity trades, we trade at Class 3, yep, types of companies, right? It's not a librarian, but we always sell Partnerly programs, not office programs. So what I think is an Meltzer bookCall someone, and it'll take you over to the website where I see filters, see the logos.

give or take 20 to, I'm sorry, roughly south of 80% of book. When you think about where we are in the marketplace now with the investment opportunities, typically what happens is the investment opportunities will present themselves at a time when the market is not going to be able to

your equity trading and a discount, which is really where we are now. Coupled that with our pivot from Fortress into being internally managed, we think the private credit business is going to be a big win for shareholders and it's going to be a big win for all of us as we're able to deploy capital more opportunistically and have access to those large pools.

risk-adjusted returns are attractive, we're going to pounce on those opportunities. The one thing I would say, counter to that, is we do have 600 billion of MSRs, we manufacture our own MSRs every day, so we're in a really good place in that business, but to the extent that things come out a little bit cheaper than where we're able to create them, we're going to be all over that.

And we are starting to see some opportunities there. Okay, great. Thanks. And then, actually, I wanted to ask about the servicing technology. You've mentioned a couple of times that there might be some opportunity to monetize that or move stuff internally. Just, yeah, any update there?

Currently, our servicing plan is we have a bunch of servicing that's moved to service director, which is our own software. We continue to have dialogue and explore other ways to create value for shareholders with either third party software or third party servicing systems.

I would say right now where steady as she goes. Okay, great. Thanks. Thanks, Bose. The next question comes from Doug Harder with Credit Seas. Let's go ahead. Hey, Doug. Doug your last. Thank you.

Good morning. You mentioned talking about potential opportunities in Europe . Do you envision that kind of being on balance sheet or would that be through the private capital? Most likely through the private capital. Could be a little bit on balance sheet. We'll be pretty selective there. I mean, what I would say over the years in how long I'm doing this and some of my partners Charles and I have been doing this for a long time.

more likely in private funds, but I think initially could come out of the public company.

Dog. Dog.

Doug?

It looks like we lost Doug. The next question comes from Eric Hagan with BTIG. Please go ahead. So much for me, Doug. Okay. So much for me, Doug.

Hey, good morning guys, how you doing? You know, the MSR portfolio looks really stable here, maybe two questions. The first is just asking about your expectations for recapture and the piece that isn't subserviced directly by you.

how you think about that? I would say everything is added to money at this point. We do have some servicing with Cooper. That goes back to our long-standing relationship with Jay and his team. When we were at Fortress, when Cooper was owned in the private equity funds there, we have some stuff with loan care. We continue to work with some third parties.

Our thing, and probably similar to, I think, the approach that Rockets had, customer retention is a huge deal. Acquiring customers is a huge deal. We have three million of them. So that's a win. How we roll out other products to them, whether it be consumer things, credit cards, and other things.

is something that we are working hard on. And again, it's not necessarily to do a transaction on the mortgage side because if they're not going to refinance, how do you keep them, how do you develop brand awareness? So we're spending a lot of time on the marketing side, as well as thinking about other LOBs that can be creative and drive more earnings for shareholders. Yep, a helpful detail. Thanks. And then.

Make sure your financing is done in the capital markets in term structures which we do or make sure that you have non-marked to market facilities which we have. As it relates to shocks, I don't think we'll see a bigger shock than we saw in 2020. We would stood that extremely well. The other thing is, you know, with our financing.

The next question comes from Kevin Barker with Piper Sandler. Please go ahead. Good morning. Thanks for taking my questions. I just wanted to follow up on the origination side. Do you see any particular opportunities emerging within certain channels that may make it more advantageous to invest in that space? No.

I appreciate the comments around limited amount of refi opportunity with...

You know mortgages at three and a half percent but there are certain child that may be opening up whether it's correspondent broker or even portions of the shelter business. Is there anything in there you see that you can reinvest in? I mean I think you're right. Welles exiting corresponded has certainly.

perspective, Michael talked about that in the third quarter earnings as well. So, you know, I think that there are, it feels like there are more opportunities within origination. So I would also just echo Michael's comment, we're not growing to grow, right? So we're going to be strategic in how we look at different opportunities. And Kevin, I mean, there's been a lot of work, obviously, on the retail side. We've...

we're doing a fair amount of origination, but it's still, despite the fact that Wells has pulled out a correspondent, we're still, you know, the pricing around MSRs has been, you know, pretty competitive and pretty aggressive. Well, I'll say in that we do think some mortgage companies are going to need some solutions and, you know, there could be opportunities for either M&A work, but I think right now we're in all the channels that we're in.

integrations that still need to be finalized within the origination channel or even in the servicing channel. Now there's some servicing assets moving from the legacy caliber MSP side to serviced director. That should be done I think in the second quarter.

On the origination side, that's all set. And really, some of the opportunities, as you think about the Genesis business, you think about the mortgage company. We have a ton of resources in all these different companies. The saves for shareholders are going to come as we integrate more around tech.

you know, one of the things we're going to do is we're going to create a tech hub that sits at the top of the house for all of our operating businesses that'll create efficiencies and save us some money and and, you know, we look forward to doing that. But I think it's really going to be saves in and around our own synergies on bringing these operating businesses.

The next question comes from Stephen Mars with Raymond J. Please go ahead.

Hi, good morning. Michael, you know, looking at the new segments, you know, you really piece together a broad investment platform. You know, as we take maybe more of a medium term outlook, say two to four years, you know, which of these segments do you think have the ability to have kind of outsized growth or an outsized capital allocation as you think about?

you know what the business should look like in a handful of years. I think we're going to be, well here's what I would say, our approach, and this goes back to when the company was first formed at Fortress, has always been to be more opportunistic investors rather than just being investor to deploy capital to do that, including our capital formation when we were doing M&A deal. We would typically raise capital around M&A deals.

not just to raise capital. So when you look at where we are going forward, let's use the Green Barn Company. You know, Green Barn was formerly the old Normandy partners then they rebranded to Sennlach. They, you know, they do redevelopment work in office here in the North East and they have a very good footprint with a great truck record that goes back, I think to the mid 90.

David Wells who leads that business, great guy and a great operator. That's a good example of something that will be grown strategically over time, and we'd like to allocate more capital there, and we'll probably also use either capital from the balance sheet and third-party funds to grow that business. MSR, as I point out, we have $600 billion. We could go out and buy another X hundreds of billions, but we want to make sure the risk-adjusted

So that could be an opportunity for growth. We're seeing some other opportunities around MH and other things. So, you know, it depends, but it's really going to be more opportunistically across the board, not just to grow a certain sector that we're in. The one thing I want to be clear to everybody on the phone and others that will listen to this.

is that we will always stay true to our core competency with financial services. So even on the funds that we're raising, we are going to say whether it be in commercial space, residential space, consumer space, everywhere we have experience, or have the team that have experience, that's where we're going to deploy capital. So it's going to be more opportunistic where we think we could generate.

what I would call, you know, teens-type returns. And if you look at our track record going back to 13 on our core business, our real returns are probably in and around, you know, 12% on a return on equity basis while paying out $4.5 billion of dividends. Great. Thanks, Michael.

all teens type returns. If you look at our track record going back to 13 on our core business, our real returns are probably in around 12 percent on a return and equity basis while paying out $4.5 billion of dividends. Great. Thanks, Michael. Thank you. Thank you.

The next question comes from Trevor Cranston with JMP Security. Please go ahead. Hey, thanks. Good morning. One more question on the the origination segment. You guys have obviously done a lot to reduce the expense level of the company over the course of the year. Thank you.

Would you say that the run rate numbers you show on slide 12 for expenses

Is that kind of fully reflective of everything you've done or are there any actions you've taken that are still kind of young to show up in the in the Q4 expense numbers for the definitions?

I would say that's totally reflective of what we've done. And go forward to reactions. Our actions are not going to be material. Trevor, I think it all depends on the rate market. As I pointed out in my opening remarks, you know, I thought the way that we positioned the company last year to hire rates was...

And that included unfortunately reducing headcount pretty dramatically in the business. Going back to Kevin's question about integration, we're through that, but we're going to have to adapt to markets. I think right now we feel real good where we are headcount. We feel real good where we are, the way the company's positioned.

But we want to make sure that we manage expenses across our entire operating platform and that include all of our businesses.

Got it. You mentioned potentially looking to add mortgages and hedge up the fair value of the MSR at some point. Can you maybe expand on a little bit what you'd be looking for in the market to start trying to implement that strategy?

If we think the Fed is done and we feel that the rate, like, I mean, here, our general view, or my general view, is that mortgages will do better over time. You know, you'll have periods of volatility. When we think the Fed is closer to being done, I think we'll begin adding some hedges. Across our broader portfolios, all of our portfolios are hedged.

with either interest rate swaps and or mortgages. And for now, I think in the MSR business we'll stay the course. But at some point, we'll likely have a more balanced portfolio where the MSR business will hedge. And the other thing to keep in mind there is, at 3.5 coupon is not going to refinance right now, other than just through housing turnover.

So that's an area where unless we think the mortgage basis is really cheap, we don't need to hedge out that coupon right now. Even if the Fed is done, unless we think 10-year rate is going to go to whatever 1.5% and you have some COVID type of then, then we'll react to that accordingly.

But for now, I think we've got to stay the course. The thing I would tell you about our team, and we have third-party consultants on the economic side that we meet with monthly. We have a very strong presence, I think, in the markets as we think about the macro picture, and that's something that's really, really important.

for us to maintain discipline in the business and make sure we try to catch both the ups and downs of where rates go and mortgages go.

to maintain discipline in the business and make sure we try to catch both the ups and downs of where rates go and mortgages go. Okay, next up.

Thank you. The next question comes from Juliana Boronia with Compass Point. Please go ahead.

Well, good morning. I'm glad to continue the execution, navigating a tough environment here. One thing I was curious about, and it's a topic that you think was kind of addressed earlier on in the Q&A, but I'd like to see a slightly different angle, is you actually mentioned raising private capital on the fund side. And one of the slides was a little bit about your MSR funds. I'd be curious if you think there's any opportunity to leverage the mortgage company that would inspire you to start there and who's gonna check into your program film, but First Ms.

that could be an opportunity for the RIBM platform as a whole to get some external capital in the fees and also leverage the Sub-servicer.

The answer is yes, yes, and yes. If there were three questions, if there were two, I'm going to give you yes and yes. Right now, what I would tell you on the subservicing side, we have a very good subservicing business. That will grow. There's a little bit of uncertainty. There's a couple large subservices that potentially could come to market. We're extremely well suited to be.

in a position to what I would say grow our sub-servicing and take out costs where I think that gives us an edge over others. On the MSR front, same thing. You know, we think MSRs are extremely attractive here. We do think there will be some supply. Obviously the wells announcement until that actually comes we'll see what happens.

CPR is down at 5%, but I'm at just on a dollar basis, looks like the amazement is for an important number. And the quarter, I was just trying to continue in the short term and do the first quarter, and then you want to see move around throughout the year. I'm serious, you know, how long do you think CPR is in the state, you know, near historic lows?

And at the same, on the other side of that, I'm curious how far out you think it might be to get the origination platform back to profitability. You've got to remove a little bit of the drag on the great servicing performance.

So let's take the last part of the question. On the origination side, I think we should be back to profitability either Q1 or early Q2. You know, we've taken actions, obviously, on the retail side, which is a very difficult business, as you can imagine. And I feel like we're well positioned now there. And in...

You know, in some of the earlier comments, we merged our JB business, the shelter business with retail. So again, creating more synergies and taking on more expense.

Regarding MSR's and speeds, I mean it's going to come down to housing turnover. I'm not sure who's going to refinance a three and a half coupon until mortgage rates go back to, you know, towards the lows and housing becomes a little bit more affordable. So I think we're in this for a bit. I don't see people, you know, there's no reason for somebody, the reason you see probably less

Housing transactions is why would somebody sell their house unless they need to if they have a two and a half or three percent coupon mortgage rate? So I think it's really going to come down to housing turnover if home price is cheap and up and I think it's more likely you'll see growth in the rental markets as things are less affordable today

I really appreciate the answers to the questions and I'll jump back to you. Thank you. Thank you. The next question comes from both George with KBW. Go ahead. The question asked about

Hey, thanks. Yeah, just had a follow up on the gain on sale margin. So this quarter, I mean, it looked like the gain on sale margin is up, you know, for each of the channels, I was curious if the market's kind of bottomed or just more of your volume going down and you being more selective in terms of engagement. We did see some.

In terms of prior quarter, you always estimate what your pull-through adjusted rate is when determining your margin for a given quarter, and to the extent you come in better in the following, the actual come in better, you will see improvement in margin in the current quarter.

Okay, okay. Okay, great. Thanks very much. Thanks, Bose. This concludes our question and answer session. I would like to turn the conference back over to Michael Nirenberg for any closing remarks.

Thanks everybody for dialing in. Look forward to updating you throughout the course of the quarter and on our next call. Appreciate the support. Go rhythm. The conference is now concluded. Thank you for attending today's presentation. Thank you for joining us. We'll be back in a moment. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.

and look forward to updating it throughout the course of the quarter and on our next call. Appreciate the support. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

And.

interest rates. And really just how you could, you know, you could, you could question for that risk in the portfolio more generally. Thanks. Have either, either make sure your financing is done in the capital markets, you know, in term structures which we do, or make sure that you have non-marked to market facilities which we have. As it relates to, you know, shocks, I don't think we'll, we'll see a bigger shock than we saw in, in 2020. And we, we, we would would have understood that extremely well. The other thing is, you know, with, with our financing.