BrightSpire Capital(US:BRSP)2025-10-29 20:06Interest Rate Risk - As of September 30, 2025, a hypothetical 100 basis point increase or decrease in the applicable interest rate benchmark on the loan portfolio would increase or decrease interest income by $5.2 million annually, net of interest expense [461]. - The company faces risks associated with higher interest rates, which may adversely impact the value of variable-rate investments and borrowers' refinancing abilities [8]. Credit Risk - The company is exposed to credit risk from tenants, including business closures and occupancy levels, which could impact revenue [465]. - The company’s revenue and ability to make distributions depend significantly on the economic viability of borrowers and tenants [8]. Liquidity and Investment Risks - The company’s real estate investments are relatively illiquid, which may result in losses if unable to adjust the portfolio in response to economic changes [468]. - The company held no derivative instruments as of September 30, 2025, indicating a potential exposure to interest rate fluctuations [460]. Compliance and Financial Management - The company amended its Bank Credit Facility and Master Repurchase Facilities to adjust certain covenants and reduce advance rates on financed assets to mitigate future compliance issues [471]. - The company has not received any margin calls under its Master Repurchase Facilities for the nine months ended September 30, 2025, and through October 28, 2025 [470]. Foreign Exchange Risk - The company has no foreign exchange contracts in place as of September 30, 2025, reducing exposure to foreign currency risk [473]. Accounting Standards - The company’s consolidated financial statements are prepared in accordance with U.S. GAAP, with no material changes to critical accounting estimates reported [455].