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  "documentTitle": "Blackstone Mortgage Trust, Inc. (BXMT)",
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  "authorName": "Muddy Waters Research",
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  "presentationDate": "2023-12-06 00:00:00",
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  "notes": "This slide outlines a bearish thesis on BXMT, focusing on credit risk, liquidity, and under-provisioning.",
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      "kind": "callout",
      "text": "BXMT's market cap, which is currently $4.0 billion, is at risk of being completely wiped out by these losses.",
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      "text": "BXMT has unfunded loan commitments of $2.7 billion, but with only $1.5 billion of committed or identified financings for those commitments, making it reliant on borrowers being able to refinance their interest-only loans.",
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      "text": "Even assuming rate cuts, BXMT's losses on its $23.2 billion net book value of loans could reach ~$2.5 billion to ~$4.5 billion. BXMT's market cap, which is currently $4.0 billion, is at risk of being completely wiped out by these losses. These losses are in addition to BXMT's existing loss provisions.",
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      "text": "BXMT is at risk of a liquidity crisis.",
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      "text": "We estimate ~$16 billion notional of its borrowers' interest rate swaps expire over the next year.",
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      "text": "Because many of its loans seemingly exceed collateral values, BXMT's lenders could \"hyper-amortize\" the loans if BXMT doesn't post additional collateral.",
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      "text": "BXMT has concealed the impending problems through under-provisioning and unrealistic Risk Ratings.",
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      "text": "Because asset values have fallen, as these interest-only loans begin to mature next year, we think large numbers of borrowers will be unable to refinance and repay BXMT.",
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      "text": "BXMT will likely significantly cut its dividend as soon as H2 2024 because we extrapolate that ~70%-75% of BXMT's U.S. borrowers are presently unable to cover interest expense from property cash flows absent interest rate swaps. (U.S. borrowers are 64% of net book value.)",
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      "text": "loan losses: $4.5 billion",
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      "text": "1 Calculations discussed infra.",
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      "kind": "title",
      "text": "2024 Will Be a Turning Point",
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