Blackstone Mortgage Trust(US:BXMT)2020-10-29 19:17Financial Data and Key Metrics Changes - The company reported GAAP net income per share of $0.61 and core earnings of $0.63 for Q3 2020, with a dividend of $0.62 per share [6][25] - The book value increased to $26.51 per share, up by $0.06 from the previous quarter, primarily due to a reduction in CECL reserves [27] - The portfolio size was $18.1 billion, slightly up due to higher foreign exchange rates [30] Business Line Data and Key Metrics Changes - The office portfolio showed strong performance with rent collections averaging 95% despite COVID-19 impacts [17] - The company had no new four or five-rated loans and no new specific CECL reserves during the quarter, indicating strong credit performance [10][31] - The company completed 11 loan modifications, reflecting continued support from borrowers [29] Market Data and Key Metrics Changes - The company maintained a weighted average origination LTV of 64%, indicating significant equity from well-capitalized institutional borrowers [31] - The company has $1.2 billion of liquidity at quarter-end, positioning it well for new originations [10] Company Strategy and Development Direction - The company focuses on senior mortgage lending on high-quality real estate with strong sponsors, aiming to leverage its diversified balance sheet [7] - The company is seeing a reemergence of lending opportunities, with $230 million of new loans in closing [22][76] - The company emphasizes the importance of high-quality assets and sponsors to navigate the post-COVID environment [18][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's quality and the strength of the balance sheet to outperform in the recovery phase [13] - The company views the impact of COVID-19 on the hospitality sector as cyclical rather than secular, anticipating a rebound in travel and leisure [40] - Management noted that while transaction activity remains muted, there are signs of normalcy returning to the market [20][57] Other Important Information - The company has no corporate debt maturing until 2022, with 97% of asset-level financing term-matched to underlying collateral [32] - The leadership of the loan asset management function is transitioning, with Rob Sitman succeeding Tom Ruffing [36][37] Q&A Session Summary Question: Can you talk about your hotel portfolio this quarter? - Management noted that the hotel market is disrupted but believes the impact is cyclical. They have been selective in hotel lending, focusing on low LTV loans [40][41] Question: What modifications are being made? - Modifications generally involve extending timelines in exchange for additional capital from sponsors, with strong interest payments being collected [42] Question: Is there any sponsor concentration risk? - The company has a well-diversified portfolio with strong sponsors, which is viewed as a strength rather than a weakness [48][49] Question: What drove the changes in CECL reserves? - Changes in CECL reserves were primarily due to foreign exchange rates and estimated loan tenor adjustments, not indicative of credit deterioration [50][51] Question: What is the competitive environment for large loans? - The company maintains a competitive advantage in making large loans on high-quality assets, with a unique position in the market [54][55] Question: What is the outlook for new loan commitments? - The company has $230 million of new loans in closing, indicating active engagement in the market despite cautious selection [76]