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Announcement of Periodic Review: Moody's announces completion of a periodic review of ratings of Ladder Capital Corp
Global Credit Research - 22 Jul 2020
New York, July 22, 2020 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Ladder Capital Corp and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
The Ba1 long-term corporate family rating of Ladder Capital Corp (LADR) and the Ba2 senior unsecured rating of its subsidiary, Ladder Capital Finance Holdings LLLP, reflect the company's strong and consistent financial performance, including high-quality assets, a history of profitability since inception, moderate leverage and increasing funding diversification. LADR has demonstrated strong credit results, having recorded minimal credit losses in its loan portfolio since inception in 2008, which in Moody's view reflects the company's strong risk management culture, as well as its highly experienced and well-regarded management team. LADR's ratings also take into consideration the company's business concentration in the commercial real estate sector and the relatively high proportion of secured funding in its debt capital structure, despite the recent decline largely driven by the company's January 2020 senior unsecured debt issuance. The ratings also incorporate the risk of additional margin calls on LADR's repurchase agreements from declining values in CMBS and loan collateral, all of which LADR has been able to satisfy in a timely manner, as well as a temporary increase in leverage as a result of the company's actions to manage its liquidity position since the onset of the coronavirus-related market volatility.
This document summarizes Moody's view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Finance Companies Methodology published in November 2019. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Joseph Pucella Senior Vice President Financial Institutions Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Ana Arsov MD - Financial Institutions Financial Institutions Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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