TPG RE Finance Trust: Funding Costs Are A Cause For Concern
TPG RE Finance Trust is rated Sell due to unsustainable dividend coverage and deteriorating business economics. TRTX's distributable earnings fell short of its $0.24/share dividend, with net interest income down 5.9% YoY in Q2 despite higher loan balances. Rising funding costs, narrowing loan spreads, and a shift away from favorable CLO funding are compressing NII and threatening dividend sustainability.