TPG Mortgage REIT Fields Proposals from Neuberger, Blackstone

(Bloomberg) -- TPG RE Finance Trust Inc., grappling with tumult in the U.S. mortgage market from the coronavirus pandemic, is fielding financing alternatives from prospective investors including a unit of Neuberger Berman, a group led by Mack Real Estate Credit Strategies LP and an arm of Blackstone Group Inc.

The proposal by Neuberger’s Almanac Realty Investors LLC involves the purchase of convertible debt with attached equity warrants, while the Mack offer centers on a roughly $300 million investment in the mortgage real estate investment trust’s common stock, according to people with knowledge of the matter.

The Mack proposal entails a payment of more than $10 million for the right to take over management of the REIT from investment firm TPG, said one of the people, who asked not to be identified because the matter is private.

Separately, an arm of Blackstone Group Inc. has offered to buy $1 billion or more of the company’s loans, according to some of the people.

The offers are among more than 10 alternatives that are being evaluated by the company and its advisers, with other potential structures including term loans and asset sales, one of the people said.

Representatives for TPG, Neuberger, Blackstone and Mack declined to comment.

MSD Partners LP, which manages funds on behalf of Michael Dell’s private investment firm as well as other investors, separately submitted a financing proposal to the company but is no longer in active discussions, according to a person familiar with the matter. A representative for MSD declined to comment.

Earlier this month, TPG RE sold the bulk of its commercial real estate debt securities to buyers including Oaktree Capital Management, and said it has no unpaid margin calls. The New York-based company, led by Greta Guggenheim and externally managed by an affiliate of TPG, hired Houlihan Lokey Inc. to explore financing and strategic alternatives.

TPG RE’s shares have plunged 70% this year, leaving it with a market value of about $470 million.

The REIT originates, acquires and manages mortgages and other commercial real estate‐related debt instruments secured by institutional properties in the U.S. Its portfolio consisted of 64 first mortgages and one mezzanine loan with total commitments of $5.6 billion as of Dec. 31, according to filings.

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