Ladder Capital Finance Holdings LLLP

Strong capital and asset quality Experienced management team Current access to Federal Home Loan Bank (FHLB) borrowings Concentration in commercial real estate (CRE) Reliance on secured financing lines with the potential for margin calls Our outlook on Ladder Capital Finance Holdings LLLP (LCFH) is stable. Standard&Poor's Ratings Services expects the company to maintain conservative leverage consistent with its target debt-to-equity ratio of 2x-3x, adequate liquidity, and good asset performance. We could raise our rating on LCFH if the company significantly reduced leverage to near 1.5x while maintaining strong asset performance through a complete credit cycle, or strengthens its funding profile by reducing its use of repurchase agreements. However, final rules that will terminate the membership of captive insurers

...Our outlook on Ladder Capital Finance Holdings LLLP (LCFH) is stable. Standard & Poor's Ratings Services expects the company to maintain conservative leverage consistent with its target debt-to-equity ratio of 2x-3x, adequate liquidity, and good asset performance. We could raise our rating on LCFH if the company significantly reduced leverage to near 1.5x while maintaining strong asset performance through a complete credit cycle, or strengthens its funding profile by reducing its use of repurchase agreements. However, final rules that will terminate the membership of captive insurers in FHLBs make an upgrade less likely. We could lower our rating on the company if we expected it to consistently report leverage above 2.75x, particularly if it increased its leverage by expanding its loans rather than its low-risk securities. We could also lower the rating if the company becomes more reliant on short-term funding and its stable funding ratio declines below 90%....

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