Loan Participations Sold, Net

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Loan Participations Sold, Net

6. 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):

March 31, 2019

Principal

Book

Yield/

Loan Participations Sold

Count

Balance

Value

Cost (1)

Guarantee (2)

Term

Total loan

1

$

140,504

$

139,504

L+5.96

%

n/a

Feb. 2022

Senior participation (3)(4)

1

107,330

107,237

L+4.06

%

n/a

Feb. 2022

December 31, 2018

Principal

Book

Yield/

Loan Participations Sold

Count

Balance

Value

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

(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 March 31, 2019 and December 31, 2018, our loan participations sold were non-recourse to us.

(3) During the three months ended March 31, 2019 and 2018, we recorded $1.7 million and $1.5 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 $93,000 and $110,000 as of March 31, 2019 and December 31, 2018, respectively.