Research Update: Ladder Capital Finance Holdings LLLP Rating Lowered To 'BB-' As Risks From COVID-19 Mount; Outlook Is Negative

Ladder Capital has a transitional commercial real estate (CRE) loan portfolio funded partially with repurchase facilities that have a potential for margin calls. We believe there is increased risk of margin calls in the current environment given higher risk of credit deterioration on transitional CRE loans and widening spreads on commercial mortgage backed securities (CMBS). As a result, we are lowering our issuer credit rating to 'BB-' from 'BB' and unsecured debt ratings to 'B+' from 'BB-'. The negative outlook on Ladder reflects the company's exposure to margin calls from its repurchase facilities and possible deterioration in earnings over the next 12 months in an environment where we expect there to be significant deterioration in the credit quality of Ladder's

...- Ladder Capital has a transitional commercial real estate (CRE) loan portfolio funded partially with repurchase facilities that have a potential for margin calls. - We believe there is increased risk of margin calls in the current environment given higher risk of credit deterioration on transitional CRE loans and widening spreads on commercial mortgage backed securities (CMBS). - As a result, we are lowering our issuer credit rating to '##-' from '##' and unsecured debt ratings to 'B+' from '##-'. - The negative outlook on Ladder reflects the company's exposure to margin calls from its repurchase facilities and possible deterioration in earnings over the next 12 months in an environment where we expect there to be significant deterioration in the credit quality of Ladder's asset portfolio....

Research Update