v3.25.2
Collateralized Loan Obligations
 6 Months Ended
Jun. 30, 2025
Transfers and Servicing [Abstract]  
Collateralized Loan Obligations Collateralized Loan Obligations
The table below summarizes our collateralized loan obligations as of June 30, 2025.
FacilityCollateral
$ in thousandsTerm
Weighted Average Interest Rate(1)
Amount OutstandingFair ValueCountPrincipal Balance OutstandingFair Value
INCREF 2025-FL1Oct 20426.27%$998,234 $1,001,129 30 $1,217,359 $1,220,104 
Total$998,234 $1,001,129 30$1,217,359 $1,220,104 
(1)    Represents the weighted average interest rate in effect as of June 30, 2025.
On May 7, 2025, the Company financed a pool of loans and loan participations from its existing loan portfolio through INCREF 2025-FL1, contributing $1.2 billion of commercial real estate loan investments into the CLO and issuing $1.2 billion of notes. The Company retained $219 million of the CLO. The rated notes bear interest at Term SOFR plus a spread. The CLO provides the Company with match-term financing on a non-mark-to-market and non-recourse basis. The Company received $995.7 million in proceeds from the transaction. The third-party notes were issued at a discount of $2.5 million which was recorded as an unrealized loss of $2.5 million within unrealized gain (loss) on loans, net in the condensed consolidated statement of comprehensive income for the three months ended June 30, 2025.

INCREF 2025-FL1 is a VIE primarily because the unrelated investors do not have substantive voting or participating rights. To assess whether the Company has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, the Company considered, among other factors, its role in establishing the VIE and its ongoing rights and responsibilities. We determined that we are the primary beneficiary as (1) we have the power to direct activities of the VIE that most significantly impact the VIE’s economic performance, and (2) through our retained interests, we have the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. The majority of the operations of the VIE are funded with cash flows generated from the loans within the VIE. Assets held by the VIE can be used only to settle obligations of the VIE. The liabilities of the VIE are non-recourse to us and can only be satisfied from the assets of the VIE. We are not obligated to provide, have not provided, and do not intend to provide material financial support to the consolidated VIE.

The consolidation of the VIE results in an increase in our gross assets, liabilities, revenues and expenses, however the impact to our stockholders’ equity and net income are equivalent to our net retained economic interests in the VIE. During three and six months ended June 30, 2025, we recorded $9.8 million of interest expense related to the CLO. The following table details the assets and liabilities of our consolidated VIE:
$ in thousandsJune 30, 2025
Assets:
Restricted cash$150 
Commercial real estate loan investments, at fair value1,220,104 
Interest receivable3,918 
Total assets$1,224,172 
Liabilities:
Collateralized loan obligations, at fair value$1,001,129 
Interest payable2,086 
Total liabilities$1,003,215