Western Asset Mortgage Capital
Western Asset Mortgage Capital — Merger or Acquisition (June 2023)
16 slides from Western Asset Mortgage Capital's merger presentation, Jun 28, 2023
Slide 1: Terra Property Trust + Western Asset Mortgage Capital Definitive Merger Agreement
Terra Property Trust (“TPT”) + Western Asset Mortgage Capital (“WMC”) Definitive Merger Agreement June 28, 2023 Terra Property Trust
Slide 2: About this Presentation
About this Presentation This presentation relates to a proposed merger (the “Merger”) between Western Asset Mortgage Capital Corporation (“WMC”) and Terra Property Trust, Inc. (“TPT”). Neither TPT, WMC nor any of their respective representatives or affiliates makes any representation or warranty, ex
Slide 3: Transaction Highlights, TPT Overview, WMC Overview
Transaction Highlights 4 TPT Overview 10 WMC Overview 13 3
Slide 4: Transaction Highlights
Transaction Highlights 4 TPT Overview 10 WMC Overview 13 4
Slide 5: Transaction terms and exchange ratio
TPT shareholders will be issued shares of WMC Class B common stock, based on an Exchange Ratio calculated utilizing TPT’s and WMC’s Adjusted Book Values prior to closing; pro forma Exchange Ratio of 0.785 as of 03/31/2023 (1) (2) TPT / WMC shareholders are expected to own approximately 76% / 24% of
Slide 6: Transaction Highlights
Transaction Highlights Creates immediate scale and the potential to generate significant long-term value for stockholders Values WMC at 100% of its Adjusted Book Value of $106 million ($17.30 per share), compared to WMC’s market capitalization of approximately $56 million (4) WMC’s Adjusted Book Val
Slide 7: Diversified Portfolio
Diversified Portfolio + + = = Combined portfolio diversified by security, property type, geography, and duration (7) CRE Loans CRE Equity RMBS Non-Agency CMBS Other Residential Industrial Office + Retail Hotel Other B y P ro p e rt y Ty p e B y S e cu ri ty Combined $562mm 17% 9% 13% 21% 41% 68% 8%
Slide 8: Conservative Capital Structure
Conservative Capital Structure Combined company has significantly lower leverage that is in line with comps (1) WMC TPT Pro Forma 11.5x 1.5x 4.0x 1.5x 1.7x 2.4x 81% 86% 68% Total Leverage Recourse Leverage % of Debt Non-Mark-to-Market 8
Slide 9: Highly Experienced Institutional Sponsor
Highly Experienced Institutional Sponsor Mavik has a proven track record of investing in and managing US CRE Team has broad and deep experience investing together throughout cycles and across securities, property types, and markets Led by Vik Uppal, who carries extensive institutional investment exp
Slide 10: TPT Overview
Transaction Highlights 4 TPT Overview 10 WMC Overview 13 10
Slide 11: TPT Overview
TPT Overview REIT that originates, invests in, and manages loans and assets secured by CRE across the US Ownership mindset with long-term outlook anchored by stable base of permanent capital Generate compelling risk-adjusted returns by offering consistent, strong current income from CRE loans and pr
Slide 12: TPT Portfolio
TPT Portfolio # Investments 24 5 Carrying Value, Gross $621mm $157mm Carrying Value, Net $353mm (88%) $47mm (12%) LTV 73% NA Remaining Term 1.2 yrs NA Unlevered Yield 9.0% NA Target Levered IRR 13-18% 15-20% CRE LOANS CRE EQUITY Diversified initial portfolio with opportunistic investment strategy ge
Slide 13: WMC Overview
Transaction Highlights 4 TPT Overview 10 WMC Overview 13 13
Slide 14: WMC Overview
WMC Overview Residential Non Qualified Mortgages Program initiated in 2014 No cumulative principal losses Strategic partnerships with seasoned originators Target coupons of 7.5-8.5% Target LTV of 65-70% at origination Non-recourse debt through securitization Other Mortgage Credit Assets with low lev
Slide 15: Footnotes
(1) Calculated using Adjusted Book Value based on 03/31/2023 public financial statements and before deducting transaction expenses; WMC’s Adjusted Book Value deconsolidates all VIEs, and TPT’s adds back accumulated depreciation and amortization on real estate assets owned; WMC’s total leverage metri
Slide 16: Thank You
Thank You Terra Property Trust
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