KKR Mortgage REIT shares sink to 4-year low after dividend slash
07/02/2024 20:08
By Chibuike Oguh
NEW YORK, Feb 7 (Reuters) - Shares of KKR Real Estate
Finance Trust KREF.N plunged by as much as 20% to a nearly
four-year low on Wednesday after the real estate investment
trust (REIT) slashed its dividend amid souring loans.
KREF, which invests in commercial mortgages and is backed by
private equity giant KKR & Co Inc KKR.N , cut its dividend by
42% to 25 cents-per-share for the first quarter after booking a
roughly $59-million loss tied to a Philadelphia office loan, the
company announced late on Tuesday.
That loan loss provision drove KREF to a distributable loss
of about $26 million, or a loss of 37 cents-per-share, in the
fourth quarter. Wall Street analysts on average had expected a
profit of 11 cents-per-share, according to LSEG data.
KREF shares fell as low as $9.42, their lowest level since
March 2020, on Wednesday. The stock pared those losses and was
down 14.5% to $10.07.
"The dividend is set at a level where we can cover with
distributable earnings ex losses with our performing loan
portfolio under a number of different scenarios, including lower
interest rates and the potential migration of loans to cost
recovery and REO (real estate owned)," KREF Chief Executive Matt
Salem said during an analyst earnings call on Wednesday.
KREF has downgraded the risk rating and increased reserves
owing to a Seattle life sciences property loan, company
executives announced.
Commercial real estate (CRE) exposure is under renewed
scrutiny as New York Community Bancorp's NYCB.N shares have
tanked after the mid-sized bank slashed its dividend and set
aside huge provisions for loans to deal with tough regulation.
Other commercial mortgage REITs were also trading lower on
Wednesday: Blackstone Mortgage BXMT.N was down 2.7%, Starwood
Property Trust STWD.N lost 1.3%, Ares Commercial Real Estate
ACRE.N fell 4.4%, Annaly Capital NLY.N declined 1.3%, TPG RE
Finance TRTX.N dropped 6%.
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Bearish trades engulf New York Community Bancorp options as
shares sink urn:newsml:reuters.com:*:nL1N3ES2F6
US regional bank stocks steady after brutal sell-off
urn:newsml:reuters.com:*:nL4N3EN2S6
Regional banks hit after New York Community Bancorp cuts
dividend urn:newsml:reuters.com:*:nL1N3EL280
US bank stocks sink after New York Community Bancorp cuts
dividend urn:newsml:reuters.com:*:nL4N3EL3YM
US regional banking shares under lens after NYCB slide
urn:newsml:reuters.com:*:nL1N3EM0XY
Moody's cuts NYCB ratings to junk, warns of more downgrades
urn:newsml:reuters.com:*:nL4N3ES02D
US regional banks tumble for second straight day on NYCB woes
urn:newsml:reuters.com:*:nL4N3EM2R5
ANALYSIS-US regional bank profits to be squeezed by pressure to
pay for deposits urn:newsml:reuters.com:*:nL4N3DF3E8
BREAKINGVIEWS-NY bank’s slide exposes regulatory booby trap
urn:newsml:reuters.com:*:nL4N3ES4RD
FACTBOX-A close look at embattled NYCB's $84.6 bln loan
portfolio urn:newsml:reuters.com:*:nL4N3ES4BP
TIMELINE-New York Community Bancorp's latest troubles
urn:newsml:reuters.com:*:nL4N3ES2MJ
New York Community Bancorp sued by shareholders as stock sinks
to 1997 level urn:newsml:reuters.com:*:nL1N3ER2Z0
Yellen concerned about US commercial real estate but says
stresses manageable urn:newsml:reuters.com:*:nL1N3ER2JR
New York Community Bancorp stock value set to halve, as Moody's
cuts ratings urn:newsml:reuters.com:*:nL4N3ER4C4
NYCB shares reverse losses as new executive chair eyes cuts to
CRE exposure urn:newsml:reuters.com:*:nL4N3ES35W
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(Reporting by Chibuike Oguh in New York; Editing by Lance
Tupper and Nick Zieminski)
((Chibuike.Oguh@thomsonreuters.com; +332-219-1834; Reuters
Messaging: chibuike.oguh.thomsonreuters.com@reuters.net))