Company: DBRG
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0001679688-25-000017
Chunk: 182

Company: DigitalBridge Group, Inc.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 8
Chunk 182
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oused were transferred into athird party warehouse entity at their acquisition price, and securitized through the issuance of securities in a collateralized loan obligation ("CLO") structure. The CLO is sponsored and managed by the third party. The Company acquired all of the subordinated notes of the CLO, which are classified as available-for-sale ("AFS") debt securities. In October 2024, the secured notes of the CLO were refinanced, with no change in the underlying collateral asset pool. The legal final maturity date, and reinvestment and non-call periods of the CLO were extended by two years. All of the Company’s subordinated notes remain outstanding. The Company received $10.4 million of excess net proceeds from the refinance as the subordinated note holder, which was applied as a return of capital in October 2024.  The stated legal final maturity of the CLO has been extended to 2037. Following the end of the non-call period of the CLO, which is now October 2026, the subordinated notes may be redeemed (in whole, not in part) at the option of the collateral manager or the Company with consent of the collateral manager, if there is sufficient proceeds from sale of collateral assets, including payment of expenses therewith. The redemption price for the subordinated notes is equal to the excess interest and principal proceeds payable at the time of redemption.The balance of the CLO subordinated notes is summarized as follows: Amortized Cost without Allowance for Credit LossAllowance for Credit LossGross Cumulative Unrealized(in thousands)GainsLossesFair ValueDecember 31, 2024$35,122 $— $— $— $35,122 December 31, 202350,927 — — — 50,927 In estimating fair value of the CLO subordinated notes, classified as Level 3 of the fair value hierarchy, the Company used a benchmarking approach by looking to the implied credit spreads derived from observed prices on recent comparable CLO issuances, and also considering the current size and diversification of the CLO collateral pool, and projected return on the subordinated notes. Based upon these data points, at December 31, 2024 and 2023, the Company determined that the issued price of the subordinated notes, net of capital distributions, was a reasonable representation of fair value and that the CLO subordinated notes are not impaired.  Equity Investments of Consolidated