Trump’s debt is the least mysterious aspect of his finances

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When President Donald Trump performed at an NBC town hall on Thursday night, presenter Savannah Guthrie asked a question that has come up a lot in the past two weeks.

“Who do you owe $ 421 million to?” Guthrie asked, citing a recent New York Times story about Trump’s tax returns, which said the obligations would be due in the next four years.

The idea that its creditors are a secret became a meme after the newspaper report that said lenders are often not named on tax returns.

But the identities of Trump’s lenders have been known for half a decade. In 2015, then-candidate Trump filed his first personal financial disclosure with the US government. It listed debt-laden properties, names of the companies that issued the loans, due dates, and a range of debt values.

Also, because the loans are mortgages, they exist on public records, on county registers, and in some cases on commercial mortgage-backed securities.

The majority of Trump’s liabilities fall into three main groups: loans made by commercial real estate lender Ladder Capital against its office properties; Deutsche Bank loans for comparatively risky properties such as his Washington hotel and the Doral Resort; and loan from Vornado Realty Trust to two office towers in which it has minority interests. Other loans are mostly older and smaller.

The $ 421 million figure quoted by the Times is a personally guaranteed subset of at least $ 600 million in loans that Trump’s company owes. In addition, there is approximately $ 450 million in debt tied to its 30 percent stake in Vornado’s office towers.

Some of the loans were sold in commercial mortgage-backed securities and are now owned by a large number of other investors – some of whom are difficult to identify. These typically include pension funds, insurance companies, hedge funds, and other institutional investors.

Given the fragmented nature of ownership of this debt, it is unlikely that even the Trump Organization would have knowledge of these investors or be in contact with them about the loans. When problems with the debt arose, communication would typically be through an intermediary known as a credit servicer.

Many of the loans will mature in the next few years, but Trump, whose previous career spanned a number of bankruptcies, likely has some flexibility.

When he refinanced Trump Tower with a $ 100 million loan in 2012, it was valued at $ 480 million. A 2015 refinance from 40 Wall Street raised a $ 160 million loan on an estimate of $ 540 million.

That left both properties with relatively little leverage for Manhattan properties, suggesting either a newly learned financial conservatism from Trump or squeamishness on the part of Ladder Capital, Trump’s second largest lender after Deutsche Bank.

An August rating of the buildings by the Bloomberg Billionaires Index, based on current net income and prevailing capitalization rates, was less rosy, ranking them at $ 365 million and $ 375 million, respectively. But as long as the pandemic doesn’t rub off office values, the real estate could be in far more debt if Trump needed it.

Because Trump made the historic decision to retain ownership of his company and because the government filing itself was self-reported, critics and professional ethicists have long feared that Trump might have other unreported liabilities that could pose conflict or even a national security risk . However, no such liabilities have arisen.

At one point, Trump updated a disclosure to reflect the money owed Michael Cohen, his former personal attorney, who paid adult film actress Stormy Daniels to prevent her from going public on allegations of an affair with Trump.

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