7. PARTICIPATIONS SOLD

Participations sold represent senior interests in certain loans that we sold. We present these participations sold as both assets and non-recourse liabilities because these arrangements do not qualify as sales under GAAP. The income earned on these loan participations is recorded as interest income and an identical amount is recorded as interest expense on our consolidated statements of operations.

The following table details overall statistics for our participations sold ($ in thousands):


	June 30, 2014						December 31, 2013
	Underlying Loans			Participations Sold			Underlying Loans			Participations Sold
Number of loans		3			3			1			1
Principal balance	$	632,503		$	461,078		$	173,837		$	90,000
Weighted-average cash coupon⁽¹⁾		L+4.55	%		L+2.99	%		L+5.66	%		L+5.12	%
Weighted-average all-in yield / cost⁽¹⁾		L+5.77	%		L+3.21	%		L+9.25	%		L+5.26	%

(1)	As of June 30, 2014, 39% of our participations sold are indexed to one-month LIBOR and 61% are indexed to three-month LIBOR. In addition to cash coupon, all-in yield / cost includes the amortization of deferred origination fees / financing costs.