Consolidated Variable Interest Entities Assets and Liabilities, at Fair Value |
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| Consolidated Variable Interest Entities Assets and Liabilities, at Fair Value | Note 23 - Consolidated Variable Interest Entities Assets and Liabilities, at Fair Value On May 21, 2026, the Company purchased the non-investment grade and unrated subordinate tranche, including the controlling class, of a commercial mortgage-backed securities (“CMBS”) trust at a purchase price of $27.4 million. The Company determined that the CMBS trust is a variable interest entity (“VIE”) and that the Company is the primary beneficiary of the VIE, as it has the power to direct the activities that most significantly affect the VIE’s economic performance, including the unilateral right to appoint and remove the special servicer, which manages delinquent and defaulted loans and related loss-mitigation activities. Additionally, the Company has the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant. Accordingly, the Company has consolidated the CMBS trust beginning on May 21, 2026, the acquisition date. The Company irrevocably elected the fair value option for the consolidated CMBS trust. As a result, the Company: (i) reports the assets and liabilities of the trust at fair value in the Consolidated Balance Sheets; (ii) recognizes changes in the trust’s net assets, including fair value adjustments, in the Consolidated Statements of Operations; and (iii) presents cash interest received by the trust, net of cash interest paid on CMBS not held by the Company, as operating cash flows in the Consolidated Statements of Cash Flows. The Company contributed $157.4 million of commercial mortgage loans, held for sale, measured at fair value to the trust at the settlement date. As of September 30, 2026, the outstanding principal balance of the Company-owned B-Piece of the CMBS trust was $49.4 million with an estimated fair value of $27.7 million. The following table presents the assets and liabilities of the consolidated CMBS trust (dollars in thousands):
________________________ In the prior year, the Company did not consolidate any CMBS trust entities. The following table presents the change in net assets of the consolidated variable interest entity (dollars in thousands):
________________________ In the prior year, the Company did not consolidate any CMBS trust entities.
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