TPG RE Finance Trust(US:TRTX)2024-07-30 21:02Interest Rate Exposure - As of June 30, 2024, the weighted average interest rate floor for the loan portfolio was 1.34%[391] - 99.8% of the loans by unpaid principal balance earned a floating rate of interest, with less than 0.9% of liabilities not containing interest rate floors greater than zero[391] - An immediate increase of 25 basis points in the benchmark interest rate would result in an increase of $7,995,000 in interest income from floating rate mortgage loan assets[392] - The total net exposure for floating rate mortgage loan assets was $3,198,152,000, leading to a net interest income change of $1,752,000 with a 25 basis point increase[392] Credit and Liquidity Risks - The company is exposed to credit risk, with performance depending on the sponsors' ability to generate adequate cash flows from properties serving as collateral[394] - Liquidity risk is associated with financing longer-maturity investments with shorter-term borrowings, potentially leading to margin call risks[401] - The company may sell assets to maintain adequate liquidity, especially during market disruptions that affect transaction activity[402] - The company is required to distribute a significant portion of its taxable income annually, which constrains its ability to accumulate operating cash flow[403] Market Conditions - Global macroeconomic conditions have led to increased volatility in public debt and equity markets, causing a reduction in investment activity in 2023 and early 2024[404] Risk Management - The company intends to hedge any currency exposures prudently, although such strategies may not eliminate all currency risk[408] Internal Controls - The effectiveness of the company's disclosure controls and procedures was confirmed by the Chief Executive Officer and Chief Financial Officer as of June 30, 2024[412] - There were no changes in internal control over financial reporting during the most recently completed fiscal quarter that materially affected the internal control[413]