Loan Participations Sold, Net

3 Months Ended

Mar. 31, 2023

LOAN PARTICIPATIONS SOLD, NET

The financing of a loan by the non-recourse sale of a senior interest in the loan through a participation agreement generally does not qualify as a sale under GAAP. Therefore, in the instance of such sales, we present the whole loan as an asset and the loan participation sold as a liability on our consolidated balance sheet until the loan is repaid. The obligation to pay principal and interest on these liabilities is generally based on the performance of the related loan obligation, and does not require an actual cash outlay from us. The gross presentation of loan participations sold does not impact stockholders’ equity or net income.

The following table details our loan participations sold ($ in thousands):


	March 31, 2023
Loan Participations Sold		Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)		Term(2)
Senior Participation(3)		1	$	229,468	$	229,003	+ 3.22	%	March 2027
Total Loan		1	$	286,835	$	284,940	+ 4.86	%	March 2027

	December 31, 2022
Loan Participations Sold		Count	Principal Balance		Book Value		Wtd. Avg. Yield/Cost(1)		Term(2)
Senior Participation(3)		1	$	224,744	$	224,232	+ 3.22	%	March 2027
Total Loan		1	$	280,930	$	278,843	+ 4.86	%	March 2027

(1)This non-debt participation sold structure is inherently matched in terms of currency and interest rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees and financing costs.

(2)The term is determined based on the maximum maturity of the loan, assuming all extension options are exercised by the borrower. Our loan participation sold is inherently non-recourse and term-matched to the corresponding collateral loan.

(3)During the three months ended March 31, 2023, we recorded $3.7 million of interest expense related to our loan participations sold. During the year ended December 31, 2022, we recorded $7.9 million of interest expense related to our loan participations sold.