NEW YORK--(BUSINESS WIRE)--
KKR Real Estate Finance Trust Inc. (the “Company” or “KREF”) (NYSE:KREF)
today announced the sale of its CMBS B-Piece portfolio for net proceeds
of $112.7 million. The sale settled on April 13, 2018 and April 16,
2018. The sale represents the exit from four of the Company’s five
direct CMBS B-Piece investments and accounts for 87% of the Company’s
total direct CMBS B-Piece portfolio’s market value as of year-end 2017.
The investments were made between the second quarter of 2015 and the
first quarter of 2016. The weighted average realized internal rate of
return and multiple of invested capital for the investments exited to
date were 18.0% and 1.3x, respectively.
Including the Company’s estimated fair value for the remaining CMBS
B-Piece investments as of June 30, 2018, the estimated net gain for
KREF’s total direct CMBS B-Piece portfolio for the six months ended June
30, 2018 is expected to be between $10.6 million and $11.9 million or
$0.20 and $0.22 per share. For the fourth quarter 2017, the investments
sold represented $0.05 per share of income. The Company plans to
redeploy the proceeds from the sale into its target assets, primarily
floating-rate senior loans.
After the sale, KREF continues to hold, on an estimated fair value basis
as of June 30, 2018, approximately $14.0 million of direct investments
in CMBS B-Pieces with a cost basis of $10.0 million and has a $40.0
million commitment to invest in an aggregator vehicle alongside KKR Real
Estate Credit Opportunity Partners L.P. (RECOP).
Commenting on the sale, Chris Lee and Matt Salem, Co-Chief Executive
Officers and Co-Presidents of KREF, stated: “Our CMBS B-Piece portfolio
has been an excellent investment. We are pleased with the outcome of the
sale and the positive economic impact for the Company and our
shareholders. We intend to continue to opportunistically invest in CMBS
and real estate related securities when the risk adjusted return and
relative value look favorable.”
Commenting on the dividend impact, Chris Lee and Matt Salem added:
“Combined with our recent deployment activities and our current
pipeline, this transaction allows us to accelerate the ramp-up of our
dividend. Given the timing and magnitude of the sale early in the
quarter, we want to provide one-time guidance on our expected second
quarter dividend. We expect the dividend to be in the range of $0.42 to
$0.43 per share. Any actual dividend declared is subject to the
discretion of the Board, which is scheduled to meet in early May. For
the second quarter of 2018, subject to the Board’s determination, we
plan to accelerate the dividend declaration to May and announce it in
conjunction with our first quarter earnings release. This early
declaration will not affect the expected timing of when the dividend is
paid in July. In the third quarter of 2018, we expect to resume our
regular dividend declaration cadence of the last month of the quarter.”
About KREF
KKR Real Estate Finance Trust Inc. (NYSE:KREF) is
a real estate finance company that focuses primarily on originating and
acquiring senior loans secured by commercial real estate assets. KREF is
externally managed and advised by an affiliate of KKR & Co. L.P. For
additional information about KREF, please visit its website at www.kkrreit.com.
Forward-Looking Statements
This release contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which reflect the Company’s current
views with respect to, among other things, its future operations,
dividend declarations, investment returns and financial performance. The
forward-looking statements are based on the Company’s beliefs,
assumptions and expectations, taking into account all information
currently available to it. These beliefs, assumptions and expectations
can change as a result of many possible events or factors, not all of
which are known to the Company or are within its control, including
those described under Part I—Item 1A. “Risk Factors” of the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2017,
filed with the Securities and Exchange Commission (“SEC”), as such
factors may be updated from time to time in the Company’s periodic
filings with the SEC. Accordingly, actual outcomes or results may differ
materially from those indicated in this release. All forward looking
statements in this release speak only as of the date of this release.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future developments or otherwise, except as required by law.
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For KKR Real Estate Finance Trust Inc.
Media
Kristi
Huller or Cara Major, 212-750-8300
[email protected]
or
Investor
Relations
Sasha Hamilton, 212-401-0447
[email protected]
Source: KKR Real Estate Finance Trust Inc.
