5 unchanged sentences
Generally, our business model is such that rising interest rates will increase our net income, while declining interest rates will decrease net income.
−Removed: As of June 30, 2024, all of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
−Removed: The following table projects the earnings impact on our interest income and expense, presented net of implied changes in incentive fees, for the twelve-month period following June 30, 2024 , of an increase in the various floating-rate indices referenced by our portfolio, assuming no change in credit spreads, portfolio composition, or asset performance, relative to the average indices during the three months ended June 30, 2024 ($ in thousands):
+Added: As of September 30, 2024, all of our loans by total loan exposure earned a floating rate of interest and were financed with liabilities that pay interest at floating rates, which resulted in an amount of net equity that is positively correlated to rising interest rates, subject to the impact of interest rate floors on certain of our floating rate loans.
+Added: The following table projects the earnings impact on our interest income and expense, presented net of implied changes in incentive fees, for the twelve-month period following September 30, 2024 , of an increase in the various floating-rate indices referenced by our portfolio, assuming no change in credit spreads, portfolio composition, or asset performance, relative to the average indices during the three months ended September 30, 2024 ($ in thousands):
Assets (Liabilities) Sensitive to Changes in Interest Rates (1)
−Removed: Interest Rate Sensitivity as of June 30, 2024 (2)(3)
+Added: Interest Rate Sensitivity as of September 30, 2024 (2)(3)
Increase in Rates Decrease in Rates
13 unchanged sentences
(5) Excludes $3.3 billion of floating rate impaired loans.
−Removed: (6) Excludes $725.4 million of non-consolidated senior interests and $100.6 million of loan participations sold, as of June 30, 2024.
+Added: (6) Excludes $770.2 million of non-consolidated senior interests and $103.5 million of loan participations sold, as of September 30, 2024.
Our non-consolidated senior interests and loan participations sold are structurally non-recourse and term-matched to the corresponding loans, and have no impact on our net floating rate exposure.
2 unchanged sentences
Investment Portfolio Value
−Removed: As of June 30, 2024, all of our portfolio earned a floating rate of interest, so the value of such investments is generally not impacted by changes in market interest rates.
+Added: As of September 30, 2024, all of our portfolio earned a floating rate of interest, so the value of such investments is generally not impacted by changes in market interest rates.
Additionally, we generally hold all of our loans to maturity and so do not expect to realize gains or losses resulting from any mark to market valuation adjustments on our loan portfolio.
3 unchanged sentences
This risk is partially mitigated by our consideration of rising rate stress-testing during our underwriting process, which generally includes a requirement for our borrower to purchase an interest rate cap contract with an unaffiliated third party, provide an interest reserve deposit, and/or provide interest guarantees or other structural protections.
−Removed: As of June 30, 2024, 95% of our performing loans have interest rate caps, with a
−Removed: weighted-average strike price of 3.3%, or interest guarantees.
−Removed: During the six months ended June 30, 2024, interest rate caps on $8.1 billion of performing loans, with a 3.4% weighted-average strike price, expired and 94% were replaced with new interest rate caps, with a weighted-average strike price of 3.5%, or interest guarantees.
+Added: As of September 30, 2024, 96% of our performing loans have interest rate caps,
+Added: with a weighted-average strike price of 3.5%, or interest guarantees.
+Added: During the nine months ended September 30, 2024, interest rate caps on $10.8 billion of performing loans, with a 3.4% weighted-average strike price, expired and 95% were replaced with new interest rate caps, with a weighted-average strike price of 3.4%, or interest guarantees.
Our loans are subject to credit risk, including the risk of default.
5 unchanged sentences
We believe that we benefit from these relationships and from our long-standing core business model of originating senior loans collateralized by large assets in major markets with experienced, well-capitalized institutional sponsors.
−Removed: Our loan portfolio’s low weighted-average origination LTV was 62.9%, excluding any loans that are impaired and any junior participations sold, as of June 30, 2024.
+Added: Our loan portfolio’s low weighted-average origination LTV was 62.8%, excluding any loans that are impaired and any junior participations sold, as of September 30, 2024.
While we believe the principal amounts of our loans are generally adequately protected by underlying collateral value, there is a risk that we will not realize the entire principal value of certain loans.
−Removed: As of June 30, 2024, we had an aggregate $759.4 million asset-specific CECL reserve related to 19 of our loans receivable, with an aggregate amortized cost basis of $2.9 billion, net of cost-recovery proceeds.
−Removed: This CECL reserve was recorded based on our estimation of the fair value of each of the loan’s underlying collateral as of June 30, 2024.
+Added: As of September 30, 2024, we had an aggregate $883.6 million asset-specific CECL reserve related to 20 of our loans receivable, with an aggregate amortized cost basis of $3.2 billion, net of cost-recovery proceeds.
+Added: This CECL reserve was recorded based on our estimation of the fair value of each of the loan’s underlying collateral as of September 30, 2024.
Our portfolio monitoring and asset management operations benefit from the deep knowledge, experience, and information advantages derived from our position as part of Blackstone’s real estate platform.
17 unchanged sentences
As a result, we substantially reduce our exposure to changes in portfolio value related to changes in foreign currency rates.
−Removed: In addition, substantially all of our net asset exposure to foreign currencies has been hedged with foreign currency forward contracts as of June 30, 2024.
+Added: In addition, substantially all of our net asset exposure to foreign currencies has been hedged with foreign currency forward contracts as of September 30, 2024.
The following table outlines our assets and liabilities that are denominated in a foreign currency (amounts in thousands):
−Removed: June 30, 2024
+Added: September 30, 2024
GBP EUR All Other (1)
7 unchanged sentences
(2) Represents the U.S.
−Removed: Dollar equivalent as of June 30, 2024.
+Added: Dollar equivalent as of September 30, 2024.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.