How the hell did Donald Trump refinance a Trump Tower mortgage with a $100 million loan?
Our conversation, conducted via email and slightly edited for the stream, is below.
Cillizza: Let’s start simple: What is the loan in question? When did Trump take it down? And when does it arrive?
Scannel: The new loan is a refinance of a commercial mortgage that the Trump Organization took out on Trump Tower in 2012. It was a 10-year loan with an interest rate of 4.2% which is expired this year, according to a financial statement filed by Trump. .
Cillizza: Earlier this year, his longtime accounting firm – Mazars – drifted away from the veracity of its financial records over the past decade. Does this count in this loan?
It is very likely that the new lender was aware of these public documents and would have come across them during their own due diligence and credit analysis before authorizing the loan. Banks do their own research on the creditworthiness of borrowers and make decisions based on multiple factors. Axos declined to comment on the loan.
Cillizza: What do we know about the bank that agreed to refinance the loan?
Scan: Axos Bank is based in San Diego. It was once known as the Internet Bank, and its chairman for more than a decade was Greg Garrabrants, a Trump supporter who previously worked at Goldman Sachs and McKinsey. He and the credit manager, who signed the loan agreement, have donated thousands of dollars to Republicans, Trump and Trump-linked campaigns in recent years.
Cillizza: Why would they do that given Trump’s financial and legal peril?
Scannel: For banks, it is a question of risk, reward and repayment.
With this story, Trump turned to smaller lenders, who agreed to fund deals based on the terms they negotiated, whether personal guarantees, high interest rates or debt. other warranties. The collateral for the loans are the Trump properties, which in this case are a towering Fifth Avenue condo and office building, with a prime location and Gucci as the anchor tenant. Eric Trump said the company was financially sound despite the legal pressures it faced. “We have incredibly low debt, have a tremendous amount of cash and have an extremely profitable business. We’ve had no problems refinancing,” he said.
Cillizza: Finish this sentence: “This refinance does ________ for Trump’s overall finances.” Now explain.
Scan: The deal shows there are still lenders willing to fund the Trump brand even though the parent company faces criminal charges and there are ongoing investigations into the company and its founder.
Based on Trump’s disclosure, this is the only loan due in 2022, so it alleviates, for now, any pressure the company faces due to existing debt. Deutsche Bank’s loans for its Miami golf course, Trump National Doral, are due next year.