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Loan Participations Sold, Net
 12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Loan Participations Sold, Net

7. 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. The gross presentation of loan participations sold does not impact stockholders’ equity or net income.

The following tables detail our loan participations sold ($ in thousands):

 

     December 31, 2018  

Loan Participations Sold

    Count    Principal
Balance		      Book
Value		      Yield/Cost(1)     Guarantee(2)      Term  

Total loan

    1    $         123,745      $         122,669        L+5.92 %      n/a        Feb. 2022  

Senior participation(3)(4)

    1      94,528        94,418        L+4.07 %      n/a        Feb. 2022  
     December 31, 2017  

Loan Participations Sold

    Count    Principal
Balance		      Book
Value		      Yield/Cost(1)     Guarantee(2)      Term  

Total loan

    1    $ 141,119      $ 138,907        L+5.94 %      n/a        Feb. 2022  

Senior participation(3)(4)

    1      80,706        80,415        L+4.14 %      n/a        Feb. 2022  

 

(1)

Our floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred fees / financing costs.
(2)

As of December 31, 2018 and December 31, 2017, our loan participation sold was non-recourse to us.
(3)

During the years ended December 31, 2018 and 2017, we recorded $16.6 million and $10.1 million, respectively, of interest expense related to our loan participations sold.
(4)

The difference between principal balance and book value of loan participations sold is due to deferred financing costs of $110,000 and $291,000, as of December 31, 2018 and December 31, 2017, respectively.