AFC Gamma Successfully Exits $84.0 Million Loan to Subsidiary of Public Company H

Rhea-AI Summary

AFC Gamma (NASDAQ: AFCG) announced the successful exit of its $84 million loan to a Subsidiary of Public Company H. The loan, which was the largest in AFC Gamma's portfolio, had issues with the borrower missing an April interest payment. Despite this, AFC Gamma sold the loan to a third party at par plus accrued interest, achieving a 19.9% internal rate of return (IRR). CEO Daniel Neville emphasized the company's focus on reducing exposure to underperforming credits and plans to redeploy the capital into deals with strong risk-adjusted returns. AFC Gamma specializes in lending to state-law compliant cannabis operators and targets direct lending opportunities between $10 million and $100 million.

Positive

• Successfully exited $84 million loan, the largest in the portfolio.
• Achieved a 19.9% internal rate of return (IRR) from the loan.
• Sale of loan was at par plus accrued interest.
• CEO emphasized focus on reducing exposure to underperforming credits.
• Plan to redeploy capital into deals with strong risk-adjusted returns.
• Focus on diversifying the portfolio.

Negative

• Borrower failed to make the April interest payment in May.
• Largest loan in portfolio was underperforming, indicating potential risk in investment choices.

WEST PALM BEACH, Fla., June 04, 2024 (GLOBE NEWSWIRE) -- AFC Gamma, Inc. (NASDAQ:AFCG) (“AFC Gamma”) today announced that it has successfully exited its $84.0 million loan to Subsidiary of Public Company H. This was AFC Gamma’s largest loan in its portfolio and during our last earnings call, we noted that the borrower failed to make its April interest payment in May. Through active portfolio management, AFC Gamma is pleased to announce that it has sold the loan to a third-party at par plus accrued, which generated a 19.9% internal rate of return (“IRR”) over the life of the loan.

“When I joined AFC, I was focused on reducing exposure to underperforming credits through proactive portfolio management. This exit demonstrates our commitment to working through challenging loans to deliver value for our shareholders. We look forward to redeploying the capital into deals with strong risk adjusted returns and further diversifying our portfolio,” said Daniel Neville, AFC Gamma’s Chief Executive Officer. “Furthermore, we are pleased to exit the largest loan in our portfolio and generate an IRR of 19.9% for our shareholders.”

About AFC Gamma, Inc.

AFC Gamma, Inc. (NASDAQ: AFCG) is a publicly-traded, institutional lender that originates, structures and underwrites loans secured by commercial real estate and other types of financing solutions. AFC Gamma targets direct lending and bridge loan opportunities typically ranging from $10 million to $100 million across multiple real estate sectors, with a specialization in lending to state-law compliant cannabis operators. It is based in West Palm Beach, Florida.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect the company’s current views and projections with respect to, among other things, operating results and anticipated investments.  All statements other than historical facts, are forward-looking statements. Words such as “believes,” “expects,” “will,” “intends,” “plans,” “guidance,” “estimates,” “projects,” “anticipates,” and “future” or similar expressions are intended to identify forward-looking statements.  These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions and are not guarantees of future performance, conditions or results.  Certain factors, risks and uncertainties discussed under the caption “Risk Factors” and elsewhere in AFC Gamma’s most recently filed periodic reports on Form 10-K and Form 10-Q and subsequent filings, could cause actual results and performance to differ materially from those projected in these forward-looking statements. 

Investor Relations Contact:
Robyn Tannenbaum
(561) 510-2293
ir@afcgamma.com
www.afcgamma.com

Media Contact:
Profile Advisors
Rich Myers and Rachel Goun
(347) 343-2999
afcgamma@profileadvisors.com

FAQ

What did AFC Gamma announce about its $84 million loan?

AFC Gamma announced it successfully exited its $84 million loan to a Subsidiary of Public Company H.

What was the internal rate of return (IRR) on AFC Gamma's exited loan?

The internal rate of return (IRR) was 19.9%.

What happened with the borrower's April interest payment?

The borrower failed to make the April interest payment in May.

How did AFC Gamma manage the $84 million loan exit?

AFC Gamma sold the loan to a third party at par plus accrued interest.

What are AFC Gamma's future plans for the capital from the loan exit?

AFC Gamma plans to redeploy the capital into deals with strong risk-adjusted returns and diversify its portfolio.

What sectors does AFC Gamma specialize in lending to?

AFC Gamma specializes in lending to state-law compliant cannabis operators.