TPG RE Finance Trust has registered an amended S-11 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were mentioned in the filing, but the offering is valued up to $100 million, although this number is usually just a placeholder. The company intends to list its stock on the New York Stock Exchange under the symbol TRTX.
The underwriters for the offering are Merrill Lynch, Citigroup, Goldman Sachs, Wells Fargo, Deutsche Bank, JPMorgan, Morgan Stanley, Barclays, TPG Capital BD and JMP Securities.
This is a commercial real estate finance company sponsored by TPG that conducts its operations as a real estate investment trust (REIT). The firm directly originates, acquires and manages commercial mortgage loans and other commercial real estate-related debt instruments for its balance sheet.
TPG’s objective is to provide attractive risk-adjusted returns to its stockholders over time through cash distributions and capital appreciation. To meet this objective, the firm focuses primarily on directly originating and selectively acquiring floating rate first mortgage loans that are secured by high-quality commercial real estate properties undergoing some form of transition and value creation, such as retenanting, refurbishment or other form of repositioning.
The collateral underlying these loans is located in primary and select secondary markets in the United States that TPG believes have attractive economic conditions and commercial real estate fundamentals. Borrowers seek transitional loans for the purpose of maximizing property value through retenanting, refurbishment or otherwise repositioning the asset to increase long-term operating cash flow, in many cases prior to refinancing the asset with longer term, typically fixed rate, financing upon asset stabilization.
At the end of March 2017, TPG’s portfolio consisted of 54 first mortgage loans with an aggregate unpaid principal balance of $2.6 billion and four mezzanine loans with an aggregate unpaid principal balance of $58.5 million.
The company intends to use the net proceeds from this offering to originate and acquire target assets. At the same time, the remainder will be used to reduce its debt and for working capital and general corporate purposes.