Q3 2024 PennyMac Mortgage Investment Trust Earnings Call
No.
[music].
Speaker Change: Good afternoon, and welcome to Pennymac mortgage investment Trust third quarter earnings call.
Speaker Change: Additional earning materials, including the presentation slides that will be referred to in the call are available on Pennymac mortgage investment Trust's website at P. M T Dot Pennymac dotcom.
Speaker Change: Before we begin let me remind you that this call may contain forward looking statements that are subject to certain risks identified on slide two of the earnings presentation that could cause the company's actual results to differ materially as well as non-GAAP measures that have been reconciled to their.
Speaker Change: GAAP equivalent in the earnings materials.
Speaker Change: Now I'd like to introduce David Spector, Pennymac mortgage investment Trust's, Chairman and Chief Executive Officer, and Dan Karate Panama.
Speaker Change: Pennymac mortgage investment Trust's Chief Financial Officer. Please go ahead.
Speaker Change: Thank you operator.
David Spector: Pmt's third quarter financial results reflects solid levels of income excluding market driven value changes.
David Spector: Bolstered by fair value changes, including associated tax benefits.
David Spector: Net income to common shareholders was $31 million or diluted earnings per share of <unk> 36.
David Spector: Pmt's annualized return on common equity with 9% and book value per share at September 30th was $15 85.
Slightly from the end of the prior quarter.
David Spector: Turning to the origination market current their current third party estimates for total originations averaged $2 three trillion in 2025.
David Spector: Reflecting expectations for mortgage rates to decline from current levels.
David Spector: Driving growth in both refinance and purchase volumes.
David Spector: PMT still performance in recent periods of heightened volatility highlights the strength of the fundamentals underlying its long term mortgage assets and our expertise managing mortgage related investments in a changing environment.
David Spector: We continue to focus on Pmt's balance sheet and this quarter I am pleased to note that we have effectively completed the refinancing of $457 million of CRT and MSR term notes.
David Spector: With $514 million of new term notes with lower effective cost of extended durations.
David Spector: Approximately two thirds of PMT shareholders' equity is currently invested in a season portfolio of Msr's in the unique GSE lender risk share transactions, we invested in from 2015 to 2020.
David Spector: As the majority of mortgages underlying these assets were originated during periods of very low interest rates. We continue to believe these investments will perform well over the foreseeable future as low expected prepayments have extended the expected lives of these assets.
David Spector: Additionally, delinquencies remained low.
David Spector: The overall strength of the consumer as well as the substantial accumulation of home equity in recent years due to continued home price appreciation.
Speaker Change: MSR investments account for more than half of Pmt's deployed equity.
Speaker Change: The majority of the underlying mortgages are these MSR has remained far out of the money and we expect the MSR asset to continue to produce stable cash flows over an extended period of time.
Speaker Change: While MSR fair values were down slightly from June 30, due to fair value declines of runoff from prepayments.
Speaker Change: MSR values continue to benefit from the current interest rate environment as the placement fee income PMT receives a custodial deposits is closely tied to short term interest rates.
Speaker Change: Similarly mortgages underlying pmt's large investment in lender originated risk share have low delinquencies and a low weighted average current loan to value ratio of below 50%.
Speaker Change: These characteristics are expected to support the performance of these assets over the long term.
Speaker Change: And we continue to expect that realized losses will be limited.
Speaker Change: Given the capital raised in the second quarter in the third quarter PMT retained an increased percentage of total conventional correspondent loan production.
Speaker Change: Resulting in approximately $90 million invested in new MSR.
Speaker Change: More than double the amount from the prior quarter.
Speaker Change: In the fourth quarter, we expect PMT will retain a smaller percentage of conventional production as we optimize.
<unk> Pmt's capital allocation, while also evaluating emerging investment opportunities in the private label securitization market.
Speaker Change: We believe the mortgage landscape is evolving and increasingly presenting new opportunities for PMT to be a material participant in that market.
Speaker Change: Volume or pricing limits for the <unk> on certain types of loans, such as non owner occupied and second homes have driven increased private label securitization of such loans in recent periods.
Speaker Change: Additionally, meaningful volumes of jumbo loans are being originated in channels outside of the banks.
PMT has long benefited from its synergistic relationship with PFS Si and is leading fulfillment and servicing operation to <unk>.
Speaker Change: Process large volumes of loans at the highest quality standards and positively influence investment performance.
Speaker Change: Bind we estimate PMT accounted for approximately 7% of the total production market in the last year.
Speaker Change: With a leadership position in the correspondent channel and a growing presence in direct lending.
Through this multichannel production platform, we have been acquiring in originating growing volumes of loans, we think of the potential for PMT as securitized to drive organic investments in newly created private label Securities.
Speaker Change: Given our long standing relationships with global banks asset managers and institutional asset back investors. We believe PMT is well positioned to successfully execute on these activities, especially.
Speaker Change: Especially as the origination market returns to more normalized levels.
Speaker Change: While we have been selling jumbo loans on a whole loan basis, we've been aggregating agency eligible non owner occupied loans with the expectation that PMT will close a securitization of such loans in the fourth quarter.
Speaker Change: Followed by another similar transaction in the first quarter next year.
Speaker Change: Now I'll turn it over to Dan who will review the drivers of Pmt's third quarter financial performance and Pmt's run rate potential.
Thank you David.
Speaker Change: PMT earned $31 million and net income to common shareholders in the third quarter or <unk> 36 per diluted common share.
Dan Karate: Pmt's credit sensitive strategies contributed $26 million in pre tax income.
Dan Karate: Of the $17 million were from organically created CRT investments $6 million were from non agency subordinate MBS and $3 million were from other opportunistic investments in GSE CRT.
Speaker Change: As David mentioned the outlook for our current investments in organically created CRT remains favorable with a low underlying current weighted average loan to value ratio below 50% and our 60 day delinquency rate of one 3% both as of September 30.
Speaker Change: The interest rate sensitive strategies contributed pretax income of $500000.
Speaker Change: The fair value of Pmt's, MSR investment decreased by $84 million, but the decrease in mortgage rates drove an increase in future prepayment projections.
Speaker Change: These fair value declines were offset by the combined impact of changes in the fair value of MBS interest rate hedges and a related income tax effects.
MBS fair value has increased by $128 million due to the decline in mortgage rates interest rate hedges decreased by $67 million fair value declines on Msr's on interest rate hedges held in Pmt's taxable REIT subsidiary drove the $15 million tax benefit this quarter.
Speaker Change: <unk> of the tax benefit the interest rate sensitive segment.
Speaker Change: Interest rate sensitive segment contributed approximately $19 million to net income.
Speaker Change: The fair value of Pmt's MSR asset at the end of the quarter was $3 8 billion.
Down slightly from $3 9 billion at June 30, as fair value declines in runoff from prepayments more than offset new investments from loan production.
Speaker Change: Delinquency rates for borrowers underlying pmt's MSR portfolio remained low while servicing advances outstanding decreased to $71 million from 83 million at June 30th No principal and interest advances are currently outstanding.
Speaker Change: Income from Pmt's correspondent production segment was up from last quarter driven by higher volumes.
Speaker Change: Total correspondent loan acquisition volume was $26 billion in the third quarter up 15% from the prior quarter driven by the larger overall market.
Speaker Change: Conventional loans acquired for Pmt's account totaled $5 9 billion.
Speaker Change: Up 167% from the prior quarter due to PMT, retaining a larger percentage of the total conventional correspondent production.
Speaker Change: We expect this percentage to decrease to approximately 15% to 25% in the fourth quarter in order to optimize pmt's capital allocation.
Speaker Change: Profitability in this segment in recent periods has benefited from the release of liabilities related to representation and warranty is provided at the time of securitization as a high volumes of loans produced from 2020 to 2020 to pass the three year window for violations with minimal repurchase related losses.
Speaker Change: We expect the contribution from the release of liabilities declined to more normalized levels over the next several quarters.
Speaker Change: The weighted average fulfillment fee rate was 19 basis points down from 20 basis points from the prior quarter.
Speaker Change: PMT reported $35 million of net income across its strategies, excluding market driven value changes and the related tax impacts unchanged from the prior quarter.
Speaker Change: Looking forward slide seven outlines the run rate potential expected from Pmt's investment strategies over the next four quarters.
Speaker Change: Pmt's current run rate reflects a quarterly average of 37 per share up from 33 per share last quarter, primarily driven by the decline in short term interest rates, which reduces expected financing costs.
Speaker Change: If the yield curve Steepens further we expect Pmt's overall run rate would continue to increase closer to the 40% range driven by overall higher overall yields and interest rate sensitive strategies.
Speaker Change: Turning to capital liquidity is in place for repayment in full of the $210 million in exchangeable senior notes due in November.
Speaker Change: As David mentioned earlier, we strengthened our capital position refinancing MSR and CRE term notes at more attractive rates and longer duration.
Speaker Change: At the end of the prior quarter, we issued $355 billion of three and a half year MSR term notes with a cost of sofa, plus 275 basis points in July proceeds from that issuance were used to refinance $305 million of MSR term notes, which were at a cost of sofa, plus 419 basis points that will mature in <unk>.
Speaker Change: 27.
Speaker Change: And in August we issued $159 million for year CRT term notes with the cost of Super plus 310 basis points.
Speaker Change: Actively refinancing $152 million of notes, which were at a cost of silver plus 375 basis points that were due to mature in 2025.
Speaker Change: We will now open it up for questions operator.
Speaker Change: Thank you I would like to remind everyone. We will only take questions related to Pennymac mortgage investment trust our PMC.
Speaker Change: Also ask you. Please keep your questions limited to one preliminary question and one follow up question as we'd like to ensure we can answer as many questions as possible.
Speaker Change: If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad and if you'd like to withdraw your question again its star one.
Speaker Change: Your first question comes from the line of Jason Weaver with Jones trading. Please go ahead hey.
Speaker Change: Good afternoon.
Jason Weaver: Just wanted to hone in on one of Dan's remarks there.
Jason Weaver: Specifically regarding the steepness of the yield curve and the earnings power of the entire PMT would you say that that changes the calculus for the board as far as dividend policy goes going forward and how might that evolve over time.
Speaker Change: I think our narrative has been pretty similar around our expected earnings power and how that plays how that plays into the.
Speaker Change: The dividend evaluation. So we've been in this inverted yield curve environment for a pretty significant amount of time to the extent that we see the yield curve invert over time that should allow for greater earnings power and the interest rate sensitive strategies as the yields on those longer those.
Speaker Change: Assets, which are really keyed off of longer term rates.
Speaker Change: <unk>, which we mark to market on a on a.
Speaker Change: On a monthly basis or a quarterly basis.
Speaker Change: As those yields increase or become.
Speaker Change: Higher relative to the rates at which we're funding those assets, which are generally at spreads over short term rates that drives the overall earnings power and could push us back up towards that our run rate backup towards the 40 level as I mentioned in my remarks, that's really been the case over the last several quarters.
Speaker Change: And we're now starting to see that.
Speaker Change: The inversion really really takes shape.
And really see that path back to the 40.
Speaker Change: <unk> 40 run rate.
Speaker Change: And so.
Speaker Change: As a as a dividend or as.
Speaker Change: The board evaluates the dividend and.
Speaker Change: As we look at the dividend we've generally weak.
Speaker Change: Generally endeavor to keep that stable to the extent that we see that path back to to 40, which now seems more apparent given the changes in the environment that the fed has begun lowering short term rates.
Speaker Change: Most recently, we've seen this increase in the longer end of the curve and so really a flattening out there. So I think we're finally starting to see what we've been talking about for the last few quarters come to fruition.
Speaker Change: Which really in.
Speaker Change: In terms of the in terms of the dividend and the run rate moving towards it.
Speaker Change: Sort of plays into the narrative that we've had and the stability that we've had for the dividend over time.
Speaker Change: Okay. Thank you for that.
Speaker Change: Just as a follow up I was curious if maybe more open ended but if youre thinking about any emerging opportunities to shift your equity allocation, possibly more towards the credit sensitive strategies given that the shift in monetary policy.
Speaker Change: Yes look I think Jason as you pointed out.
And as I mentioned in my opening remarks, I do think there is a there is a very good opportunity.
Speaker Change: To increase our investment in credit sensitive assets, we're seeing a lot of good securitization activity and investor loans and second homes.
Speaker Change: From the GSE.
Speaker Change: And as I mentioned, we're looking to close the deal in this quarter and aggregating to do another deal right. After the new year and look. This is this is what PMT was.
Speaker Change: Back in 2009, when we IPO PMT. This was the investment thesis that we were going to see a return to private label securitization.
And it's a whole lot longer than we thought it would be but I think we're seeing it fairly very clearly.
Speaker Change: I like I like the activity that we're seeing in PFS Si in terms of jumbo loan originations and I think theres opportunity between.
Speaker Change: They are currently executing those zones whole loan, but I think there could be opportunities to securitize those loans as well as.
Speaker Change: <unk> been through correspondent to securitize them. So I think the aggregation for jumbo loan deal given the power of these two great companies is one where if we if it met our requirements.
Speaker Change: Required returns, we can do jumbo loan securitization and so I do think that as I think about it we've got this great CRT investment that's that's.
Speaker Change: Willing off capital and the ability to redeploy it into credit sensitive strategies.
Speaker Change: Something that I would like to do and it's something that as I mentioned, we'll be kicking off this quarter.
Speaker Change: Got it that's very helpful color. Thanks again guys.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of.
Speaker Change: George with <unk>. Please go ahead.
George: Hey, guys. Good afternoon actually a couple of follow ups, one just on the Steepening curve the way that's happening now with the 10 year selling off.
Speaker Change: Does that are you kind of agnostic to how the curve steepens in terms of it impacting your <unk>.
Speaker Change: <unk> returns.
Speaker Change: So yes those were fairly.
Speaker Change: Fairly agnostic to how the curve steepens its really when we're looking at the interest rate.
Speaker Change: Sensitive strategy is the relationship between the longer end of the curve in the shorter end of the curve, so whether interest rates come down or longer term rates go up.
And when I say short term rates I mean really financing rates.
Speaker Change: That drives that spread overall in the interest rate sensitive strategies to be larger and drive that income potential or return potential for the strategy, so either either way or both.
Speaker Change: <unk> is helpful and we're fairly agnostic to.
Speaker Change: Exactly.
Speaker Change: Each way or both.
Okay, great. Thanks, and then as you noted you've been selling the jumbos.
Speaker Change: PFS side.
Speaker Change: Can you just talk about the the returns that those were securitized I assume youre selling them just because securitization has not kind of hit the hurdle rates that you are targeting and can you just talk about how close that math is getting.
Speaker Change: That's right I think that we.
Speaker Change: We've got a I want to complete a securitization of investor loans, and second homes and really build on that.
Speaker Change: I think it's something that we need to.
Speaker Change: We did a jumbo securitization back in around 2013, and so we have.
Speaker Change: We have the muscle memory, we just need to reignite, it and I think that.
Speaker Change: It's one that we will that will get done.
Speaker Change: I would say that it's it's it's getting close to our return target.
Speaker Change: I would say.
Speaker Change: Yeah.
Speaker Change: It's not there yet but.
Speaker Change: I think given the amount of jumbo loan activity, we're seeing in the marketplace and really the ability to aggregate rather quickly to do a securitization is what I'm finding encouraging about a jumbo loan securitization now I'll tell you when you're securitizing investor loans and second home loans that are eligible for delivery to the age.
Speaker Change: <unk> if there is a disruption in the private label market you have the ability to deliver those loans to the GSC. So that's in effect you're hedged for the spread risk that's not the case with jumbo loans. So what's.
Speaker Change: <unk> to me is that we are able to aggregate quickly get into market quickly to do a securitization to help alleviate the spread risk associated with doing the jumbo loan securitization. So we just got to get.
Speaker Change: I wanted to get our first securitization under our belt.
Speaker Change: We will continue to grow that operation I don't see I don't see private label securitization declining I think clearly the banks have spoken theyre not going to be act as active in jumbo loans other than for there they are prime customers.
Speaker Change: I think there is the opportunity to do jumbo loan <unk>.
Speaker Change: Securitization and similarly, I don't see the gse's, reducing their pricing on investor loans, and second homes, and so I think there'll be opportunities. There. So I'm really I'm really as you can tell excited about the opportunity that we have in P&C, given PFS <unk> and PMT together represent 7% of the.
Speaker Change: Mortgage market, so the ability to aggregate the loans.
Speaker Change: Is one thats not the issue.
Speaker Change: And I think that Thats I think its one that over time, we're going to continue.
Speaker Change: To grow our expertise and our ability to securitize those loans and have subordinate bond investments.
Speaker Change: Great. That's helpful. Thank you.
Yes.
Speaker Change: Your next question comes from the line of Doug Harter with UBS. Please go ahead.
Doug Harter: Thanks, David one of the areas you didn't touch on as possible securitization would be second liens, where obviously Panama.
Doug Harter: <unk> is originating those as well can you just talk US execution. There has come close to hurdle rates or would still homes or ways to go to be attractive.
Speaker Change: It does it does have a ways to go as you can tell from.
Doug Harter: As I'm talking today to you on the phone.
Doug Harter: At the top of the waterfall of the Investor loans. The second homes does meet our return targets.
Doug Harter: Secondly, as jumbo loans, which is getting very close I think the second liens.
Doug Harter: We're still seeing a tremendous.
Doug Harter: <unk> bid on a whole loan basis going to.
Doug Harter: Other market participants, who have a lower cost of capital.
Doug Harter: And so it's one that will continue.
Doug Harter: Continue to look at.
Doug Harter: And we monitor as you can tell all of these markets.
Doug Harter: But suffice it to say there was a market disruption or we saw the ability to invest in there there is nothing to prevent us from doing that securitization.
Doug Harter: Great and then as you think about.
Speaker Change: How should we think about the amount of capital that can be deployed into these opportunities.
Doug Harter: And.
Doug Harter: Just.
Speaker Change: And thinking about kind of the level of MSR retention that PMT is likely to have kind of over the coming quarters.
Speaker Change: Look I think that.
Speaker Change: We've done a really nice job keeping the MSR investment in the <unk> of the MSR portfolio rather flat.
Speaker Change: Over the last two to three years as we've been faced with the capital constraints of PMT.
Speaker Change: Look at the run off from our CRT investments as the capital that we can use to redeploy into credit sensitive strategies to maintain that.
At a pretty constant level at the end of the day as we continue to produce returns that we've seen over the past few years I am confident that we'll be able to raise additional capital.
Speaker Change: That's something that we've been focused on in PMT.
Speaker Change: Really focused on delivering the returns.
That exceed the dividend yield that will allow us to continue to see PMT share price go up go up. So we can we can issue common equity or we can issue other forms of equity, but clearly.
Speaker Change: We have enough capital to really to really ramp up the securitization effort as I mentioned from the from the capital running off from CRT and then we will continue to produce the returns.
Speaker Change: Great. Thank you David.
Speaker Change: Your next question comes from the line of Matthew Howlett with B Riley. Please go ahead.
Matthew Howlett: Oh, Hey, David Hey, Dan Thanks for taking my question. Thanks.
David Spector: Thanks, Matt.
Matthew Howlett: And Jay just to follow up on the last question would you expect PMT eventually to retain more you'll get back to that.
Matthew Howlett: 50% retention of conventional correspondent production would you have so many opportunities. It sounds like you just had this incredible subset does it makes sense to just to sell can you just selling the PFS XI and free up capital for the securitization that Brent and other things.
Speaker Change: Yes, exactly Matt I think thats related.
Speaker Change: The idea behind the reduction in terms of the allocation.
Speaker Change: Conventional correspondent that with that we mentioned from <unk>.
Speaker Change: 42% in the past quarter to 15.
Speaker Change: 15% to 25% so as we see these opportunities.
Speaker Change: In the securitization market.
Speaker Change: And our aggregating for those opportunities.
Speaker Change: Sharing that we're not sort of crowding out.
Speaker Change: By adding on more additional MSR through the conventional correspondent retention and so.
Speaker Change: I think it's exactly as you described that opening up.
Speaker Change: A little bit of capital room, too to aggregate and retain the interest on those securitizations.
Speaker Change: And that's really leading to that reduction on the on the correspondent side as David mentioned if we.
Speaker Change: <unk>.
Speaker Change: If we deliver returns as we expect and are able to raise additional raise additional capital.
Speaker Change: That.
Speaker Change: That could be a catalyst to increase that.
Speaker Change: Increase that proportion of the conventional loans that are retained again.
Speaker Change: And invest in additional MSR alongside the.
Speaker Change: Alongside the credits that are a greater concentration in the credit sensitive assets.
Speaker Change: But that's sort of as we move forward and we see the opportunities.
Speaker Change: Moving forward.
Speaker Change: Thanks for that.
Speaker Change: I remember I've been covering PMT for a long time and you really 50 50 credit interest rate.
Speaker Change: $5 567 years ago, it's going to take time I'd love to see you be irregular.
Speaker Change: A regular issuer in the non securitization market is going to be great. How long does it where do you want to take the credit segment. I mean do you want PMT looking out five years to be 50 50 or is this just could be a cisco be all dependent on the market.
Speaker Change: Look I think it's look warrant investment vehicle in PMT, and we want to deliver the highest.
Speaker Change: Return to our shareholders and Thats going to drive that's going to drive our decision making having.
Speaker Change: Having said that with Humana I would like to see a better balance between the credit sensitive strategies in the interest rate sensitive strategies segments.
Speaker Change: And so the ability to do more and more securitization is to increase the amount of investments in credit sensitive strategies is one that we're that we're highly focused on.
Speaker Change: But at the end of the day, it's going to be it's going to be return, it's going to be the return on common equity that we want to continue to.
Speaker Change: To be above 10% on that if.
Speaker Change: If not higher.
Speaker Change: And do it in a meaningful way and so I do think that.
Speaker Change: To take a little bit of time, but we'll clearly well on our way to getting there.
Yes, that's exciting to see like you said, David just so TMT. Originally was started out as an it's taken time, but it sounds like the non agency market is just really take off last last question.
Speaker Change: The interest rate strategy with the Steepening repo starting to come down it looks like the fed will cut a little bit more.
Speaker Change: How much more you refi refinances the crts.
Speaker Change: The MSR term notes and how much more is there left to do with this I mean can you how much cost savings is left.
Speaker Change: Okay.
Speaker Change: I think generally speaking on the.
Speaker Change: On the refinancing of debt side.
Speaker Change: Yes, it depends a little bit on what happens in the market and where spreads go and so there may be additional opportunities. Obviously, we have struck on the opportunities that we've seen thus far.
Speaker Change: <unk>.
We don't necessarily see anything imminently on the on the horizon in terms of refinancing further in terms of those term notes or or term loans that we have but we.
Speaker Change: We have seen pretty significant spread tightening over the past few quarters, that's what led to our precipitated some of these.
Speaker Change: Some of these refinancings and to the extent that we see further spread tightening.
Speaker Change: That could precipitate a civil.
Speaker Change: King at doing some further refinances, but in the in the near term we think we've done some some pretty good work here that will benefit us as we're moving forward and there isn't necessarily anything specifically on the horizon that work that we're looking at.
Speaker Change: You've got the company in great position I really appreciate it thanks guys.
Speaker Change: Thanks, Matt.
Speaker Change: Your next question comes from the line of Eric Hagen with BT I G. Please go ahead.
Eric Hagen: Alright. Thanks.
Eric Hagen: Just wanted to thank did you did you say what the source of cash or liquidity is to retire the debt thats coming due next month and is the expectation to carry lower leverage for a period of time or how are you thinking about that.
Speaker Change: So the source of funds for repaying the debt. That's due next month is drawing on our secured line.
Speaker Change: So we've positioned.
Speaker Change: Our liquidity really more or less already too to be able to retire.
Speaker Change: Retire that debt.
Speaker Change: And sorry, what was the second part of your question, Eric I didn't hear that clearly.
Eric Hagen: Well it sounds like the leverage is going to be unchanged.
The draw that you made so retire that debt is that reflective.
Eric Hagen: On the balance sheet at the end of third quarter, yes.
Yes, it's not it's not reflected at 930.
Eric Hagen: Yes, Sir.
Eric Hagen: During the month this month, but yes, youre right the.
Eric Hagen: Overall leverage is pretty would be pretty similar to 934 basically swapping.
Eric Hagen: Secured debt for that unsecured that convertible issuance.
Eric Hagen: Okay Super.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Bose George with <unk>. Please go ahead.
Speaker Change: Hey, guys. Thanks for the follow up just wanted to see if you could provide some color on the types of buyers in the whole loan market for both for the jumbos and the second liens.
Speaker Change: Look we're seeing.
Speaker Change: A wide range of buyers I think that it's.
Speaker Change: We're able to sell.
Speaker Change: These laws to insurance companies.
Were some of the some of the private equity shops are setting up their own conduit and doing their own aggregation securitization.
Speaker Change: <unk>.
Speaker Change: And similarly on the <unk> side, when we sell second secondly, we see similar buyers.
Speaker Change: And so it's it's a wide range of buyers the thing that impresses me is the depth of the market.
Speaker Change: And Thats why quite frankly.
Speaker Change: I'm fairly confident very confident in our own ability to securitize. So I think theres, a very deep bid.
Speaker Change: For these loans deeper than I've seen in quite some time and so I would just say that there's a need for for structured assets in structured investments.
Speaker Change: And so the ability quite frankly to to organically create the opportunity is one that's really unique.
Speaker Change: In the marketplace.
And so it's just it's a hit.
Speaker Change: Its not banks will tell you that it's.
Speaker Change: But it's all of the usual cast of characters that we've seen in the past.
Okay, great. Thanks, a lot.
Speaker Change: Okay.
Speaker Change: And we have no further questions at this time I will now turn it back to Mr. Specter for closing remarks.
David Spector: Well, thank you operator, and thank you all for joining us today.
Speaker Change: Really appreciate the time and the and the <unk>.
Speaker Change: <unk>. They were asked if you have any follow up questions. Please feel free to reach out to our Investor Relations group.
And they will follow up with you in May.
Speaker Change: Have a good day and will.
Speaker Change: And again, thanks, a lot for the time.
Speaker Change: This does conclude today's conference call. Thank you for your participation and you may now disconnect.
Speaker Change: Okay.
Speaker Change:
Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: Yes.