BrightSpire Capital, Inc.

Ladies and gentlemen, please stand by. Good day and welcome to the Colony Credit Real Estate Inc. First Quarter 2020 Earnings Call. Please note that today's conference is being recorded. And at this time, I'd like to turn the conference over to Mr. David Palame. Please go ahead, sir.

Good afternoon, and welcome to Colony Credit Real Estate Inc.' 's first quarter 2020 earnings conference call. We will refer to Colony Credit Real Estate Inc. as CLNC, Colony Credit Real Estate, Colony Credit, or the company throughout this call. Speaking on the call today are the company's President and Chief Executive Officer, Mike Mazzei, Chief Operating Officer, Andy Witt, and Chief Financial Officer, Neil Reddington. Chief Accounting Officer, Frank Cerasino, is also on the line to answer questions. Before I hand the call over, please note that on this call, certain information presented contains forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties, and assumptions. Potential risks and uncertainties could cause the company's business and financial results to differ materially. Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on the financial condition, results of operations, cash flows, and performance of the company, its borrowers and tenants, the real estate market, and the global economy and financial markets. The extent to which the COVID-19 pandemic impacts us, our borrowers and our tenants, will depend on future developments. which are highly uncertain and cannot be predicted with confidence, including the scope, severity, and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. For a discussion of risk that could affect results, Please see the risk factor section of our most recent 10-K and other forward-looking statements in the company's current and periodic reports filed with the SEC from time to time, cautioning that an interpretation of many of the risks should be heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. All information discussed on this call is as of today, May 7, 2020. and the company does not intend and undertakes no duty to update for future events or circumstances. In addition, certain financial information presented on this call represent non-GAAP financial measures. The company's earnings release and supplemental presentation, which was released this afternoon and is available on the company's website, presents reconciliations to the appropriate GAAP measures and an explanation of why the company believes such non-GAAP financial measures are useful to investors. And now, I'd like to turn the call over to Mike Mazzi, President and Chief Executive Officer of Colony Credit Real Estate. Mike.

Thank you, David. First, on behalf of the CLMC management team, we would like to begin by wishing everyone well as we navigate through these uncertain times. Our employees are safe in the remote working locations where, in many cases, their work lives and personal lives have fused together. I want to thank them for their warm virtual welcomes, work ethic, and positive energy, especially in these challenging times. I myself officially joined on April 1st and was able to promptly integrate remotely. In fact, the transition to a virtual workplace for the CLNC team and myself has been quite seamless with the help of technology. I have been fully engaged with all functional areas of the organization. The use of video meeting technology has allowed me to interact with all of my fellow colleagues. Our systems and controls are working well, including our treasury and banking functions, accounting and internal audit, asset management, and legal. While Andy Witt, our COO, will address certain current business actions, and Neil Weddington, our CFO, will address Q1 results shortly, I want to focus on what is happening today and the days ahead. Our asset managers continue to be in very close communication with our borrowers and tenants. In light of everything our borrowers and tenants were dealing with, April was a successful month with most borrowers and tenants paying on schedule while we worked with certain others to effectuate their payments. 99% of interest payments were made on our core loan portfolio. However, in certain cases, we agreed to utilize some portion of current reserves toward loan payments. On the tenant side, the overall performance was strong. We will continue to evaluate comprehensive and creative ways to help both borrowers and tenants through these unprecedented circumstances resulting from COVID-19. To provide further insights into April, the entire combined loan portfolio inclusive of legacy non-strategic, 90% of loans by unpaid principal balance or 50 loans paid current. Of this amount, there were four loans for 14% by unpaid principal balance, which required accessing existing reserves. Our owned real estate portfolio experienced 87% rent collections, and those tenants unable to pay rent were primarily confined to retail tenants in our legacy non-strategic portfolio. Across CLMC's core owned real estate portfolio, we remain current on all our investment level borrowings. With regard to our bank counterparties, we have worked closely with them in providing asset updates for the borrowing base and mastery purchase agreements. I'm happy to report that the dialogue has been productive and all of our banking partners have been constructive. We will continue to be actively engaged with our bank lenders in providing them asset updates. To be clear, maintaining and enhancing liquidity wherever possible has been and will remain a top priority as we navigate through this difficult time. Working cooperatively with our banking counterparties is essential to our ability to meet the challenges that we have faced and will continue to face. The capital markets continue to be volatile, and in some sectors we are witnessing unprecedented events. While the Fed's multi-trillion dollar market programs have helped stabilize bond and equity markets since March lows, we feel many of the economic effects of COVID-19 are still unknowable. This is especially the case in commercial real estate equity and debt markets. As such, the company is planning for a slower recovery with variation by region and property type, which we have incorporated into our business plans, in particular for our hospitality investment. The commercial mortgage REAP sector has too been under pressure. Except for the GSE entities, Commercial real estate lenders have generally taken a pause. Lenders of every type are focused on balance sheet and asset management. Therefore, we are also forecasting slower loan payoffs. It is within this context that we've been focused on preserving our capital. As we previously disclosed, we have taken a serious step of suspending our monthly dividend in an effort to maintain and preserve liquidity. We realize the importance of the dividend to our shareholders. However, given the unprecedented circumstances of COVID-19, this was a prudent, incremental step to support the balance sheet and to maximize the long-term value of the company and its assets. When the economic environment comes into focus and it is clear how liquidity needs are met with a meaningful margin for error, we will revisit the dividend policy. Looking ahead, given the impact of COVID-19 on the broader economy, there will be challenges for commercial real estate. In the coming months, our emphasis will continue to be on asset and liability management and liquidity. We will continue to be vigilant in maintaining controls and procedures as we gradually transition back to the workplace. We will continue to maintain an open dialogue with our shareholders, borrowers, tenants, and banking constituents. It is impossible right now to predict with any reasonable certainty the impact of COVID-19 on our industry and on our business. But we know it has been and will be substantial, and we come to work every day with that as a backdrop. Finally, in terms of our business model, the substantial majority of most of our recent origination activities have been in smaller to moderate-sized senior mortgages, which fit well within CLO structures as we experienced with our $1 billion CLL execution in late 2019. We are taking a conservative posture today, and when we together reach the other side of COVID-19, we look forward to growing this business model to take advantage of an attractive lending environment as owner-operators seek to recapitalize their assets. With that, I would now like to turn the call over to our Chief Operating Officer, Andy Witt. Andy?

Thank you, Mike. As previously highlighted and under the current circumstances, the primary focus of the organization is on asset and liability management with particular attention on liquidity. As such, we've reorganized our resources around select high-priority assets, future funding obligations, and sources of financing and liquidity that may come through asset sales from both our legacy non-strategic and core portfolios. we will continue to examine opportunities to monetize investments on our balance sheet with an eye toward enhancing liquidity in the coming quarters. Prior to the onset of COVID-19, we initiated the process of selling legacy non-strategic assets as a result of a broader corporate initiative, which has generated significant proceeds. We also reduced our exposure to warehouse line as a result of our $1 billion CLO, CLNC, issued in late 2019. As previously reported, in October 2019, we executed on a securitization transaction, which resulted in the sale of 840 million of CLO notes, collateralized by a pool of 21 senior loans and participations that we originated. with approximately 80% multifamily and office at close. Most importantly, executing on the CLO removed exposure to mark-to-mark financing on the $1 billion of senior loan collateral held in the securitization. Currently, we have $700 million of whole loan partial recourse repurchase financing collateralized by 22 positions. We have taken steps to minimize margin-related risk by negotiating margin holidays in return for a voluntary reduction of the advance rate. During April, we established or agreed to terms in certain cases on various margin holidays with our four largest counterparty banks, which encompass our loan repo hospitality exposure. Paydowns have been managed collaboratively with our bank counterparties. The agreements with the counterparty banks also provide CLNC with expanded permitted modification periods to work with our borrowers and navigate these uncertain times together. Turning to CMBS securities, our strategy utilized repurchase financing. When liquidity deteriorated late in the first quarter as a result of COVID-19, CLNC received margin calls on these finance securities. In total, since Q1 2020 began, CLNC has paid $91 million in margin calls or paydowns across its security portfolio.

Early in the second quarter, CLNC consolidated its repo financing in the company's current and periodic reports filed with the SEC from time to time, cautioning that an interpretation of many of the risks should be heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. All information discussed on this call is as of today, May 7, 2020, and the company does not intend and undertakes no duty to update for future events or circumstances. In addition, certain financial information presented on this call represent non-GAAP financial measures. The company's earnings release and supplemental presentation, which was released this afternoon and is available on the company's website, presents reconciliations to the appropriate gap measures and an explanation of why the company believes such non-gap financial measures are useful to investors. And now, I'd like to turn the call over to Mike Mazzi, President and Chief Executive Officer of Colony Credit Real Estate. Mike.

Thank you, David. First, On behalf of the CLMC management team, we would like to begin by wishing everyone well as we navigate through these uncertain times. Our employees are safe in the remote working locations, where in many cases their work lives and personal lives have fused together. I want to thank them for their warm virtual welcomes, work ethic, and positive energy, especially in these challenging times. I myself officially joined on April 1st and was able to promptly integrate remotely. In fact, the transition to a virtual workplace for the CLNC team and myself has been quite seamless with the help of technology. I have been fully engaged with all functional areas of the organization. The use of video meeting technology has allowed me to interact with all of my fellow colleagues. Our systems and controls are working well, including our treasury and banking functions, accounting and internal audit, asset management, and legal. While Andy Witt, our COO, will address certain current business actions, and Neil Weddington, our CFO, will address Q1 results shortly, I want to focus on what is happening today and the days ahead. Our asset managers continue to be in very close communication with our borrowers and tenants. In light of everything our borrowers and tenants were dealing with, April was a successful month, with most borrowers and tenants paying on schedule. while we worked with certain others to effectuate their payments. 99% of interest payments were made on our core loan portfolio. However, in certain cases, we agreed to utilize some portion of current reserves toward loan payments. On the tenant side, the overall performance was strong. We will continue to evaluate comprehensive and creative ways to help both borrowers and tenants through these unprecedented circumstances resulting from COVID-19. To provide further insights, Into April, the entire combined loan portfolio, inclusive of legacy non-strategic, 90% of loans by unpaid principal balance or 50 loans paid current. Of this amount, there were four loans or 14% by unpaid principal balance, which required accessing existing reserves. Our owned real estate portfolio experienced 87% rent collections, and those tenants unable to pay rent were primarily confined to retail tenants in our legacy non-strategic portfolio. Across CLMC's core-owned real estate portfolio, we remain current on all our investment-level borrowings. With regard to our bank counterparties, we have worked closely with them in providing asset updates for the borrowing base and mastery purchase agreements. I'm happy to report that the dialogue has been productive and all... We will provide tables identifying our hotel property loans as well as our mezzanine loans and preferred equity. There is also further information about April interest receipts, and we will provide specific loan level details for some larger investments that COVID-19 may have a material impact in the future. I also want to draw your attention to our supplemental financial report, which is available on our website. It includes additional information on each of our business segments, in addition to a description on how we define core earnings. This definition will exclude from core earnings incremental changes in CECL reserves and gains, losses, and impairments of real estate, including unconsolidated joint ventures and preferred equity investments, but will include provision for loan losses. Further, core earnings will come solely from our core portfolio, while we will report legacy non-strategic earnings separately. In addition, we continue to provide asset-by-asset details for all of our holdings in our supplemental financial report, as well as Form 10Q. We believe this added transparency will help investors and research analysts better understand our company and the value of our assets, given the additional detail it provides about our two business segments. Delineating our investments between core and legacy non-strategic portfolios, creates clarity around the core mission. We envision a pro forma core portfolio to include senior and mezzanine loans, preferred equity, commercial real estate tech securities, and net lease real estate. Further, we believe it will facilitate a greater understanding of our company and the value embedded within its assets. Now turning to the quarter. For the first quarter, CLNC's core portfolio reported gap net loss of $35 million, or 27 cents per share, and core earnings of $46.2 million, or 35 cents per share. Excluding provisions for loan losses of $2.3 million and realized gains on FX hedges of $8.6 million, core earnings was $40 million, or 30 cents per share. In addition, the company's legacy non-strategic portfolio generated gap net loss of $43.8 million, or $0.35 per share, and an LMS total earnings of $1.4 million, or $0.01 per share, after excluding $36.8 million of provision for loan losses and $0.7 million of other realized gains. During the first quarter, we paid a monthly cash dividend of 10 cents per common share for the months of January, February, and March. The dividends paid in the first quarter were more than fully covered at 100% of core earnings, excluding one-time gains and losses. As previously noted, due to the extraordinary volatility and unprecedented market conditions, we have concluded that it is prudent and in the best interest of the company to conserve available liquidity and suspend the company's monthly cash dividend beginning with the monthly period ending April 30, 2020. The Board will evaluate dividends in future periods based on customary considerations. Importantly, the company continues to monitor its taxable income to ensure that the company meets the minimum distribution requirements to maintain its status as a REIT. In terms of deployment, The company has not closed any new investments so far in 2020. Portfolio activity for the quarter included three full loan repayments of $68 million of gross proceeds, along with five partial repayments totaling $12 million of gross. We will provide tables identifying our hotel property loans as well as our mezzanine loans and preferred equity. There is also further information about April interest receipts and we will provide specific loan level details for some larger investments that COVID-19 may have a material impact in the future. I also want to draw your attention to our supplemental financial report, which is available on our website. It includes additional information on each of our business segments, in addition to a description on how we define core earnings. This definition will exclude from core earnings, incremental changes in CECL reserves, and gains, losses, and impairments of real estate, including unconsolidated joint ventures and preferred equity investments, but will include provision for loan losses. Further, core earnings will come solely from our core portfolio, while we will report legacy non-strategic earnings separately. In addition, we continue to provide asset-by-asset details for all of our holdings in our Supplemental Financial Report, as well as Form 10Q. We believe this added transparency will help investors and research analysts better understand our company and the value of our assets, given the additional detail it provides about our two business segments. Delineating our investments between core and legacy non-strategic portfolios creates clarity around the core mission. We envision a pro forma core portfolio to include senior and mezzanine loans, preferred equity, commercial real estate tax securities, and net lease real estate. Further, we believe it will facilitate a greater understanding of our company and the value embedded within its assets. Now turning to the quarter. For the first quarter, CLNC's core portfolio reported gap net loss of $35 million, or $0.27 per share, and core earnings of $46.2 million, or $0.35 per share. Excluding provisions for loan losses of $2.3 million and realized gains on FX hedges of $8.6 million, core earnings was $40 million, or 30 cents per share. In addition, the company's legacy non-strategic portfolio generated gap net loss of $43.8 million, or 35 cents per share, and LMS total earnings of $1.4 million, or one cent per share, after excluding $36.8 million of provision for loan losses and $0.7 million of other realized gains. During the first quarter, we paid a monthly cash dividend of 10 cents per common share for the months of January, February, and March. The dividends paid in the first quarter were more than fully covered at 100% of core earnings, excluding one-time gains and losses. As previously noted, due to the extraordinary volatility and unprecedented market conditions, we have concluded that it is prudent and in the best interest of the company to conserve available liquidity and suspend the company's monthly cash dividend beginning with the monthly period ending April 30, 2020. The Board will evaluate dividends in future periods based on customary considerations. Importantly, the company continues to monitor its taxable income to ensure that the company meets the minimum distribution requirements to maintain its status as a REIT. In terms of deployment, the company has not closed any new investments so far in 2020. Portfolio activity for the quarter included three full loan repayments of $68 million of gross per state comprises 25% of the core portfolio and had a carrying value of $1 billion at the end of the first quarter. This portfolio consists of industrial and office properties with a weighted average lease term of 9.5 years. As part of our enhanced disclosures implemented last year, we introduced risk ratings on all loans within our core portfolio in order to provide more detail regarding the credit and risk profile of our core business. Our overall risk rating at the end of the first quarter was 3.8, compared with 3.1 in the prior quarter, primarily reflecting the increased risk resulting from the uncertainty related to COVID-19. Then to our legacy non-strategic portfolio, this segment is predominantly composed of operationally intensive owned real estate, all retail, and certain other legacy loans originated prior to the formation of CLNC. Total net book value for this portfolio stands at approximately $196 million, or $1.49 per share. Moving to our balance sheet, our total at-share assets stood at approximately $5.4 billion as of March 31, 2020. Our debt-to-assets ratio was 60% at the end of the quarter, and our current liquidity stands at approximately $250 million between cash on hand and availability on the revolving credit facility. Use of our revolving credit facility will continue to be a source of liquidity for the foreseeable future, and we are currently renegotiating the terms of revolver with our bank syndicate. These terms include a reduction in the facility size, a reduction in the tangible net worth requirement, and certain limitations on dividends, stock repurchases, and a focus on senior loan originations and capabilities to support our existing portfolio. We believe this new arrangement will allow us the liquidity and the flexibility we need to manage our business in the near term. Lastly, I would like to comment on the current expected credit losses or CECL accounting standard, which was adopted by the company on January 1st, 2020. Based on our portfolio size and composition, we recorded a day one CISO reserve of $23 million and an additional reserve of $29 million during the first quarter as a result of the significant change to the economy caused by COVID-19. The combined impact of this new standard is an approximately $0.41 impact on our March 31, 2020 book value per share. The CISO reserves will modulate in future periods to an adjustment to net income as our portfolio expands or contracts, the credit quality and risk attributes by loans improve or decline, or overall market conditions strengthen or weaken. That concludes our prepared remarks, and with that, let's open up the call for questions. Operator? Thank you. If you'd like to ask a question today, please push star 1 on your telephone keypad. We will take our first question. We will take our first question, and our first question comes from Stephen Law. Please go ahead, Stephen. Yes, good afternoon. The state comprises 25% of the core portfolio and had a carrying value of $1 billion at the end of the first quarter. This portfolio consists of industrial and office properties with a weighted average lease term of 9.5 years. As part of our enhanced disclosures implemented last year, we introduced risk ratings on all loans within our core portfolio in order to provide more detail regarding the credit and risk profile of our core business. Our overall risk rating at the end of the first quarter was 3.8 compared with 3.1 in the prior quarter, primarily reflecting the increased risk resulting from the uncertainty related to COVID-19. Then into our legacy non-strategic portfolio, this segment is predominantly composed of operationally-intensive owned real estate, all retail, and certain other legacy loans originated prior to the formation of CLNC. Total net book value for this portfolio stands at approximately $196 million, or $1.49 per share. Moving to our balance sheet, our total at-share assets still at approximately $5.4 billion as of March 31st, 2020. Our debt-to-assets ratio was 60% at the end of the quarter, and our current liquidity stands at approximately $250 million between cash on hand and availability under our revolving credit facility. Use of our revolving credit facility will continue to be a source of liquidity for the foreseeable future. and we are currently renegotiating the terms of the revolver with our bank syndicate. These terms include a reduction in the facility size, a reduction in the tangible net worth requirement, and certain limitations on dividends, stock repurchases, and a focus on senior loan originations and capabilities to support our existing portfolio. We believe this new arrangement will allow us the liquidity and the flexibility we need to manage our business in the near term. Lastly, I would like to comment on the current expected credit losses or CISO accounting standard, which was adopted by the company on January 1, 2020. Based on our portfolio size and composition, we recorded a day one CISO reserve of $23 million and an additional reserve of $29 million during the first quarter. as a result of the significant change to the economy caused by COVID-19. The combined impact of this new standard is an approximately $0.41 impact on our March 31, 2020 book value per share. The CISO will modulate in future periods to an adjustment to net income as our portfolio expands or contracts, the credit quality and risk attributes by loans improve or decline, or overall market conditions strengthen or weaken. That concludes our prepared remarks and with that, let's open up the call for questions. Operator? Thank you. If you'd like to ask a question today, please push star 1 on your telephone keypad. We will take our first question.

And then kind of piggybacking that, you mentioned, I think, in the prepared remarks for the presentation, some pre-approved or permitted modifications have already been pre-approved or permitted.

So can you give us some examples of what those offerings are that you're going to your buyers with that are already pre-approved or permitted from your counterparty? Stephen, I think you covered a couple of different things there, right? So, one is the revolver, and perhaps I can address that to start with, and I may turn over to Andy, who, as you said, was talking about some of the margin holidays and the like. So, in terms of the revolver, yes, we're very pleased with that. I mentioned in my prepared remarks that we were working on that, and in fact, we have completed that. that arrangement, so we have moved a couple of things. One, the tangible net worth requirement has declined, and we think that will give us some flexibility as it relates to potential transactions that may come down the road. As I think Mike has said, we don't really know what we don't know. There's a whole lot of things that could happen over the next few months, and as we look to preserve liquidity, that gives us some flexibility around opportunities for liquidity. With that, we've reduced the facility size from $560 million to $450 million, and that compares to borrowings of about $300 million. So overall, we're pleased with that. We've had full support from all of the banks in that facility. There are some limitations that come with that around dividends, and stock repurchases. But frankly, as we've been looking at liquidity, we're in that same boat anyway in terms of wanting to preserve liquidity. So, hopefully that answers the question around the revolver. And with that, Andy, would you like to talk a little bit about some of the retail arrangements?

Sure, sure. Thank you, Neil. I think as it relates to the margin holidays, we've finalized agreements or agreed to terms with a number of our whole loan repo lenders. And the basic principle of those agreements is in a pay down of the advance rate in exchange for a margin holiday. And generally what that's included is a period of time in which to work with our borrowers under a predetermined period. set of modifications, and those may include forbearing interest. They may include the use of reserves. They may include waiving certain covenants to keep the property operating. So, those are a few of the things that we have, you know, worked out with our counterparty banks, essentially. Great. Thanks for the comments, Daniel and Andy.

And, Mike, my last question, I think, or at least until I get back to the queue, but management structure, I may have missed it, but I didn't hear a lot of or any commentary, I don't think. But is that just should be considered just on hold indefinitely at this point, or there's still discussions going on at the colony level or the board, independent board?

Can you give us any update or color on any progress or where we stand as of today with that?

Thank you for the question. Colony Capital is pretty clear to put out a press release regarding this. I really have nothing more to add. The press release is pretty clear that it's on pause now. Now, separately, you know, I think that in this environment, that's common sense. A lot of these strategy things are put on pause. So that I think is consistent with the overall market, but there was a press release to that effect. Yep, yep. Nope. I saw that. I just wanted to make sure they're going to do now.

And then kind of piggybacking that, you mentioned, I think, in the prepared remarks for the presentation, some pre-approved or permitted modifications have already been pre-approved or permitted.

So can you give us some examples of what those offerings are that you're going to your borrowers with that are already pre-approved or permitted from your counterparty? Stephen, I think you covered a couple of different things there, right? So one is the revolver, and perhaps I can address that to start with, and I may turn over to Andy who, as you said, was talking about some of the margin holidays and the like. So in terms of the revolver, yes, we're very pleased with that. I mentioned in my prepared remarks that we were working on that, and in fact, we have completed that. that arrangement, so we have moved a couple of things. One, the tangible net worth requirement has declined, and we think that will give us some flexibility as it relates to potential transactions that may come down the road. As I think Mike has said, we don't really know what we don't know. There's a whole lot of things that could happen over the next few months, and as we look to preserve liquidity, that gives us some flexibility around opportunities for liquidity. With that, we've reduced the facility size from $560 million to $450 million, and that compares to borrowings of about $300 million. So overall, we're pleased with that. We've had full support from all of the banks in that facility. There are some limitations that come with that around dividends, and stock repurchases. But frankly, as we've been looking at liquidity, we're in that same boat anyway in terms of wanting to preserve, preserve liquidity. So, hopefully that answers the question around the revolver. And with that, Andy, would you like to talk a little bit about some of the retail arrangements?

Sure, sure. Thank you, Neil. I think as it relates to the margin holidays, we've finalized agreements or agreed to terms with a number of our whole loan repo lenders. And the basic principle of those agreements is a pay down of the advance rate in exchange for a margin holiday. And generally what that's included is a period of time in which to work with our borrowers under a predetermined period. set of modifications, and those may include forbearing interest. They may include the use of reserves. They may include waiving certain covenants to keep the property operating. So, those are a few of the things that we have, you know, worked out with our counterparty banks, essentially. Great. Thanks for the comments, Daniel and Andy.

And my last question, I think, or at least until I get back to the queue, but management structure, I may have missed it, but I didn't hear a lot of or any commentary, I don't think. But is that just should be considered just on hold indefinitely at this point, or there's still discussions going on at the colony level or the board, independent board? Can you give us any update or color on any progress or where we stand as of today with that? Thank you for the question. Colony Capital is pretty clear to put out a press release regarding it. I really have nothing more to add. The press release is pretty clear that it's on pause now. Now, separately, you know, I think that in this environment, that's common sense. A lot of these... If you add, you know, the same number to the numerator and denominator, that's why it's gone up for this period. But... That was more as a result of the drawdown. If you took a look at sort of a net debt concept, I think it would have been more consistent. All right. Fair enough. And then I think I heard you disclose around 50% of your legacy book thus far. I think I heard a 48% number and a 53% number that dissolved or under contract. So maybe the under contract was the bigger of those two numbers. Yeah, is that the right way to think of it? Is that, you know, whatever started in legacy already 50% has been resolved?

Yes, that's exactly the way to think about it. 50% or approximately 50% has now been resolved. Okay, that's great.

And then, yeah, the comments around enhanced credit disclosures, Neil, in the 10Q, can you maybe flush that out a little bit? Because it seems like you... provided improved credit disclosures in this slide deck as well. So what is the further detail that we might expect to see in the queue? I'll actually address that. Okay, great. Thanks, Mike. First of all, we provide more tables, you know, that we think are driven by the COVID environment, so tables that show where we've used interest reserves and things like that by property type. So you'll see some of that flushed out in the filing. We also made sure that when we, because we moved risk ranking on about 30 assets this time, we want to give you a column on this long listing that shows you the previous risk rating and the current risk rating so you can see the move there. And then we also broke out some disclosures on some of the larger, two of the larger assets that we have. to give some more narrative around those and more insight into those. Okay, that's great. And then, the New York hospitality loan, that is 100% resolved with this 2018 retirement, correct? That is absolutely 100% resolved. Okay. And then, you said that the overall book is still 13% hospitality. Legacy and Core, and that's after the resolution of New York Hospitality? Or is that the right sizing for the Go Forward Hospitality share of the book? That is the core book. It's about $590 million, about 10 long. And generally speaking, you know, listen, as we go forward, as I said in my prepared remarks, the thinking is that once we get past this COVID-19, and we feel like we have an ample margin or buffer of liquidity, then you'll see the orientation toward more moderately sized loans, maybe the $25 to $50 million, more senior loans that are better suited for CLO-type liability structures or CMVS conduit loan securitization, as well as triple net, and less orientation toward Margin loans and preferred equity in MES. All right. That's great. I'll leave it there. Thanks for all the answers. Have a good night. Thanks, Randy. Thank you. Ladies and gentlemen, that does conclude our question. And if you add, you know, the same number to the numerator and denominator, that's why it's going up for this period. That was more as a result of the drawdown. If you took a look at sort of a net debt concept, I think it would have been more consistent. All right. Fair enough. And then I think I heard you disclose around 50% of your legacy book thus far. I think I heard a 48% number and a 53% number that dissolved or under contract. So maybe the under contract was the bigger of those two numbers. Yeah, is that the right way to think of it? Is that, you know, whatever started in legacy already 50% has been resolved?

Yes, that's exactly the way to think about it. 50% or approximately 50% has now been resolved.