Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from David Fick – Stifel Nicolaus & Company, Inc.
David Fick – Stifel Nicolaus & Company, Inc.
Can you talk about the Moodys pending downgrade of CMBS deals? By the way thank you a lot for putting the OC and IC test chart in your disclosures but, I’m just wondering how concerned you might be able the potential for downgrades coming from Moodys going forward?
Andrew C. Richardson
I think Moodys had made those downgrade actions already and whether they would affect deals would be our deals that use Moodys ratings with would be our [inaudible] one, two, seven and nine deals. All those actions have occurred and we’re still in compliance with our OC and our IC tasks. The reason for that is those rating actions occurred principally on everything from 2006 onward and we don’t have much exposure to those vintage deals.
David Fick – Stifel Nicolaus & Company, Inc.
You think they’re done at this point?
Andrew C. Richardson
Yes.
David Fick – Stifel Nicolaus & Company, Inc.
Assuming that all of your borrowers meet extension requirements you sort of made that statement, I’m just wondering how much soft maturity is there this year and how are you handicapping or monitoring the extension status and what kind of triggers do they have for meeting their extensions?
Andrew C. Richardson
I think that there’s a certain amount of automatic extensions and then there’s extensions where borrowers need to meet certain coverage tests and given economic conditions I think that – first of all we expect to have minimal repayments this year and the borrowers that don’t meet those tests or we don’t think are going to meet those tests, we’re in discussions with them right now and we’re actively seeking to get something in turn for an extension if we’re going to give them an extension.
I think nobody wants to be selling collateral today but we also obviously want to get our capital back so it’s a different discussion with each borrower. All of the extensions that we have given to date have been if they haven’t met a test we’ve gotten something in return for it.
David Fick – Stifel Nicolaus & Company, Inc.
Which would typically be more equity?
Andrew C. Richardson
More equity, a partial pay down, funding interest reserves to carry the loan for the next couple of years, those types of things.
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