Great Ajax Corp. (Form: 8-K, Received: 05/05/2020 16:20:53)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 5, 2020

(Exact name of registrant as specified in charter)

Maryland

001 36844

47-1271842

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

9400 SW Beaverton—Hillsdale Hwy

(Address of principal executive offices)

Registrant’s telephone number, including area code:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Common stock, par value $0.01 per share

AJX

New York Stock Exchange

7.25% Convertible Senior Notes due 2024

AJXA

New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):


¨			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨


Item 2.02.			Results of Operations and Financial Condition

On May 5, 2020, Great Ajax Corp., a Maryland corporation (the “Company”), issued a press release regarding its financial results for the first quarter ended March 31, 2020 (the “Press Release”). A copy of the Press Release is attached hereto as Exhibit 99.1 and is available on the Company’s website.

The information provided in Item 2.02 of this report, including Exhibit 99.1, shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.


Item 7.01.			Regulation FD Disclosure

On May 5, 2020, the Company will hold an investor conference call and webcast to discuss financial results for the first quarter ended March 31, 2020, including the Press Release and other matters relating to the Company.

The Company has also made available on its website presentation materials containing certain additional information relating to the Company and its financial results for the first quarter ended March 31, 2020 (the “Presentation Materials”). The Presentation Materials are furnished herewith as Exhibit 99.2, and are incorporated by reference in this Item 7.01. All information in Exhibit 99.2 is presented as of the particular date or dates referenced therein, and the Company does not undertake any obligation to, and disclaims any duty to, update any of the information provided.

The information provided in Item 7.01 of this report, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall the information or Exhibit 99.2 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.


Item 9.01.			Financial Statements and Exhibits


Exhibit						Description
99.1						Press Release dated May 5, 2020
99.2						May 2020 Presentation Materials

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			GREAT AJAX CORP.

			By:			/s/ Mary Doyle
			Name:			Mary Doyle
			Title:			Chief Financial Officer

GREAT AJAX CORP. ANNOUNCES RESULTS FOR THE QUARTER

ENDED MARCH 31, 2020

First Quarter Highlights

•Formed a joint venture that acquired $184.8 million in unpaid principal balance (“UPB”) of mortgage loans with collateral values of $292.9 million and an aggregate purchase price of $170.4 million. As of March 31, 2020, the joint venture was prefunded with $132.6 million of cash for additional loan purchases of which 677 re-performing mortgage loans ("RPLs") with UPB of $123.2 million closed in April for a purchase price of $114.0 million. We retained $61.3 million of varying classes of related securities issued by the joint venture to end the quarter with $312.1 million of investments in debt securities and beneficial interests

•Purchased $0.2 million of non-performing mortgage loans ("NPLs") with UPB of $0.2 million and underlying collateral values of $0.3 million, and 26 RPLs for $1.2 million, with UPB of $2.0 million and collateral values of $3.1 million to end the quarter with $1.1 billion in net mortgage loans

•Interest income of $27.3 million; net interest income after provision for credit losses of $9.1 million

•Overall cost of funds decreased approximately 21 basis points

•Net income attributable to common stockholders of $0.4 million

•Basic earnings per share (“EPS”) of $0.02

•Taxable income of $0.05 per share

•Book value per share of $14.37 at March 31, 2020

•Collected total cash of $62.4 million from loan payments, sales of real estate owned ("REO") and investments in debt securities and beneficial interests

•Held $31.2 million of cash and cash equivalents at March 31, 2020; average daily cash balance for the quarter was $58.6 million

•At March 31, 2020, approximately 74% of our portfolio based on UPB had made at least the last 12 out of 12 payments

New York, NY—May 5, 2020 —Great Ajax Corp. (NYSE: AJX), a Maryland corporation that is a real estate investment trust, today announces its results of operations for the quarter ended March 31, 2020. We focus primarily on acquiring, investing in and managing a portfolio of RPLs secured by single-family residences and commercial properties and, to a lesser extent, NPLs. In addition to our continued focus on residential RPLs, we also originate and acquire small-balance commercial loans ("SBCs") secured by multi-family retail/residential and mixed use properties and acquire multi-family retail/residential and mixed use and commercial properties.

Selected Financial Results (Unaudited)

($ in thousands except per share amounts)


	For the three months ended
	March 31, 2020		December 31, 2019		September 30, 2019		June 30, 2019		March 31, 2019
Loan interest income^(1,2,3)	$	19,999	$	22,095	$	23,866	$	24,621	$	26,557
Net interest income	$	14,216	$	13,229	$	13,406	$	12,689	$	13,767
Earnings from debt securities and beneficial interests⁽⁴⁾	$	2,019	$	4,203	$	3,322	$	3,140	$	2,416
Total revenue, net^(1,5,6)	$	8,037	$	13,716	$	15,316	$	20,703	$	15,184
Consolidated net income⁽¹⁾	$	1,496	$	7,119	$	8,223	$	13,626	$	8,121
Net income per basic share	$	0.02	$	0.31	$	0.39	$	0.67	$	0.39
Average equity⁽¹⁾	$	356,539	$	368,814	$	348,521	$	340,470	$	336,050
Average total assets⁽¹⁾	$	1,559,821	$	1,556,054	$	1,523,956	$	1,559,729	$	1,587,871
Average daily cash balance⁽⁷⁾	$	58,586	$	66,072	$	55,881	$	48,907	$	59,484
Average carrying value of RPLs⁽¹⁾	$	1,080,453	$	1,098,477	$	1,121,100	$	1,136,133	$	1,230,512
Average carrying value of NPLs⁽¹⁾	$	32,767	$	31,973	$	31,447	$	35,213	$	39,807
Average carrying value of SBC loans	$	22,116	$	25,002	$	27,558	$	28,075	$	36,181
Average carrying value of debt securities and beneficial interests	$	298,304	$	245,701	$	198,320	$	192,129	$	135,449
Average asset level debt balance^(1,8)	$	1,067,983	$	1,068,164	$	1,057,536	$	1,107,812	$	1,127,673

____________________________________________________________

(1)Reflects the impact of consolidating the assets, liabilities and non-controlling interests of Ajax Mortgage Loan Trust 2017-D ("2017-D") and Ajax Mortgage Loan Trust 2018-C ("2018-C"), which are 50% and 37%, respectively, owned by third-party institutional investors.

(2)Loan interest income excludes interest income from debt securities and beneficial interests and bank account balances.

(3)Loan interest income for the quarters ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019 is net of impairments of $2.1 million, $0.6 million, $3 thousand, $0.1 million and $0.2 million, respectively, on our loan pools.

(4)Interest income on investment in debt securities and beneficial interests issued by our joint ventures is net of servicing fees and credit losses on beneficial interests of $3.0 million for the quarter ended March 31, 2020.

(5)Total revenue includes net interest income, income from equity method investments and other income.

(6)Total revenue for the quarter ended June 30, 2019 includes approximately $5.2 million net gain from an RPL sale, after adjusting for foregone interest income, reduced interest expense and other loan related expenses.

(7)Average daily cash balance includes cash and cash equivalents, and excludes cash held in trust.

(8)All quarters have been updated to reflect average asset level debt balance from total average debt balance.

Our consolidated net income attributable to common stockholders decreased $6.3 million for the quarter ended March 31, 2020 compared to the quarter ended December 31, 2019 primarily as a result of a $5.1 million provision for losses on our loan and securities portfolios driven primarily by the expectation of deferrals of borrower payments, extended duration on loans and extensions of foreclosure timelines as a result of the relief provisions for the global pandemic caused by the novel coronavirus ("COVID-19") outbreak. This reserve reflects the macroeconomic impact of the COVID-19 outbreak on mortgage loan and residential real estate markets generally and is not specific to any loan losses or impairments in our portfolio. Our book value declined to $14.37 per share from $15.80 at December 31, 2019 primarily from the effects of a $28.4 million non-cash mark-to-market adjustment to the fair value of our debt securities as generally determined by marks provided by our financing counterparties.

Net interest income prior to the provision for losses increased $1.0 million over the prior quarter primarily driven by a decrease of $0.8 million in interest expense and a $0.2 million increase in interest income. Our overall cost of funds decreased approximately 21 basis points during the first quarter primarily as a result of a full quarter’s impact of our rated secured borrowing that closed in November 2019.

On January 1, 2020 we adopted Accounting Standards Update (ASU) No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL”). Under CECL, we are required to record the net present value of the expected life of loan losses on our Mortgage loans and our Investments in beneficial interests. Our transition adjustment on January 1, 2020 resulted in a reclassification from discount to the allowance for losses in the amount of $14.4 million with no impact on Shareholder equity. On March 31, 2020, we recorded a charge to accrete $0.4 million of credit loss expense resulting from the January 1 transition adjustment and a $4.7 million increase in the allowance for losses driven by expectations from the COVID-19 outbreak, as described above. This resulted in a total provision for loss expense of $5.1 million for the first quarter of 2020.

Our investments in joint venture debt securities and beneficial interests, which were made in the first quarter were on our consolidated balance sheet for a weighted average of only 19 days during the quarter and therefore provided minimal benefit to our earnings during the first quarter.

We acquired one NPL for $0.2 million with UPB of $0.2 million, and underlying collateral values of $0.3 million and 26 RPLs with UPB of $1.2 million and underlying collateral value of $3.1 million during the quarter ended March 31, 2020. These loans were acquired and included on our consolidated balance sheet for a weighted average of 32 days of the quarter. We ended the quarter with $1.1 billion of mortgage loans with an aggregate UPB of $1.2 billion.

During the quarter ended March 31, 2020 we sold 26 SBC mortgage loans with a carrying value of $26.1 million and UPB of $26.2 million for a loss of $0.7 million.

We recorded $0.9 million in impairments on our REO held-for-sale portfolio in real estate operating expense for the quarter ended March 31, 2020 compared to $0.4 million for the quarter ended December 31, 2019. We continue to liquidate our REO properties held-for-sale at a faster rate than we acquire properties, with 19 properties sold in the first quarter while five were added to REO held-for-sale through foreclosures. The impairment was driven primarily by an extension of expected liquidation timelines based on state and local eviction moratoriums, and additional related expenses, and an overall slowdown in real estate sales due to the impact of the COVID-19 outbreak. We expect the rate of new foreclosures to slow due to the current moratorium in many states.

We recorded a loss from our investments in affiliates of $1.1 million for the quarter ended March 31, 2020 compared to a gain of $31 thousand for the quarter ended December 31, 2019. The loss is primarily due to the flow through impact of mark-to-market losses on shares of our stock held by our Manager and our Servicer. We account for our investments in our Manager and our Servicer using the equity method of accounting.

We use security and loan repurchase agreements, among other means, to fund our investment activities. Our securities repurchase agreements are subject to margin calls based on the fair value of the security. Due to the turmoil in the financial markets resulting from the COVID-19 outbreak, we received an unusually high volume of margin calls from our financing counterparties. During the quarter ended March 31, 2020, we met margin calls in the amount of $28.2 million and had $32.4 million of cash collateral on deposit with financing counterparties at March 31, 2020. This cash is included in Prepaid expenses and other assets on our consolidated balance sheet at March 31, 2020 and is not netted against our Borrowings under repurchase agreements. Subsequent to March 31, 2020, our required cash collateral position has declined as security prices increased and our financing counterparties returned a portion of the cash collateral.

New investments during the quarter included $61.3 million of investments in debt securities and beneficial interests in joint ventures that were on our balance sheet for a weighted average of only 19 days of the quarter and therefore provided limited benefit to our earnings for the first quarter. Interest income from our investments in debt securities and beneficial interests issued by our non-consolidated joint ventures is recognized by us net of servicing fees, which are incurred, instead, by each joint venture. This is different than our investments in mortgage loans that have interest income recognized on a gross basis with the offsetting servicing fee recorded as expense in a separate income statement line.

We collected $62.4 million of cash during the quarter as a result of loan payments, loan payoffs, sales of REO and cash collections on our securities portfolio to end the first quarter with $31.2 million in cash and cash equivalents. $50.0 million of our cash collections were derived from our mortgage loan and REO portfolios as a result of loan payments, loan payoffs and sales of REO during the quarter and $12.4 million were derived from interest and principal payments on investments in debt securities and beneficial interests. Of the $50.0 million of cash collections from mortgage loans and REO, we received $20.1 million from loans paying the full amount of principal, past due interest and charges.

During the quarter ended March 31, 2020 we co-invested with a third-party institutional investor to form a $332.5 million joint venture, and retained $61.3 million of varying classes of related securities, to end the quarter with

$312.1 million of investments in securities and beneficial interests. We acquired 20.0% of each class of the securities of Ajax Mortgage Loan Trust 2020-A ("2020-A"), which acquired 978 RPLs and NPLs with UPB of $184.8 million and an aggregate property value of $292.9 million. At March 31, 2020, the joint venture was prefunded with $132.6 million and closed loan purchases of $123.2 million in UPB and $189.9 million of collateral with a purchase price of $114.0 million in April 2020. The senior securities represent 75% of the UPB of the underlying mortgage loans and carry a 2.375% interest rate. Based on the structure of the transaction we do not consolidate 2020-A under Generally Accepted Accounting Principles.

The following table provides an overview of our portfolio at March 31, 2020 ($ in thousands):


No. of loans	6,060			Weighted average LTV⁽⁵⁾	74.5		%
Total UPB	$	1,207,885		Weighted average remaining term (months)	304
Interest-bearing balance	$	1,131,370		No. of first liens	6,001
Deferred balance⁽¹⁾	$	76,515		No. of second liens	59
Market value of collateral⁽²⁾	$	1,917,331		No. of rental properties	9
Price/total UPB⁽³⁾	82.4		%	Capital invested in rental properties	$	1,394
Price/market value of collateral	54.8		%	No. of REO held-for-sale	45
Re-performing loans	97.1		%	Market value of REO held-for-sale⁽⁶⁾	$	11,329
Non-performing loans	2.5		%	Carrying value of debt securities and beneficial interests in trusts	$	346,450
Small-balance commercial loans⁽⁴⁾	0.4		%	Loans with 12 for 12 payments as an approximate percentage of UPB⁽⁷⁾	74.0		%
Weighted average coupon	4.52		%	Loans with 24 for 24 payments as an approximate percentage of UPB⁽⁸⁾	67.0		%

____________________________________________________________

(1)Amounts that have been deferred in connection with a loan modification on which interest does not accrue. These amounts generally become payable at maturity.

(2)As of date of acquisition.

(3)Our loan portfolio consists of fixed rate (52.1% of UPB), ARM (9.4% of UPB) and Hybrid ARM (38.5% of UPB) mortgage loans.

(4)SBC loans includes both purchased and originated loans.

(5)UPB as of March 31, 2020 divided by market value of collateral and weighted by the UPB of the loan.

(6)Market value of other REO is the estimated expected gross proceeds from the sale of the REO less estimated costs to sell, including repayment of servicer advances.

(7)Loans that have made at least 12 of the last 12 payments, or for which the full dollar amount to cover at least 12 payments has been made in the last 12 months.

(8)Loans that have made at least 24 of the last 24 payments, or for which the full dollar amount to cover at least 24 payments has been made in the last 24 months.

Since quarter end, we have acquired 677 residential RPLs with aggregate UPB of $123.2 million in one transaction from a single seller. The purchase price equaled 92.5% of UPB and 60.0% of the estimated market value of the underlying collateral of $189.9 million. These loans were acquired into the joint venture formed in March 2020 with proceeds from the established prefunding account.

On April 6, 2020 we closed a private placement of $80.0 million of preferred stock and warrants to institutional accredited investors pursuant to a securities purchase agreement dated April 3, 2020. We issued 820,000 shares of 7.25% Series A Fixed-to-Floating Rate Preferred Stock and 2,380,000 shares of 5.00% Series B Fixed-to-Floating Rate Preferred Stock, each at a purchase price per share of $25.00 and two series of five-year warrants to purchase an aggregate of 4,000,000 shares of our common stock at an exercise price of $10.00 per share. Each series of warrants includes a put option that allows the holder to sell the warrants to us at a specified put price on or after July 6, 2023. In addition, we granted the purchasers an option to purchase up to an additional 800,000 shares of Series A Preferred Stock and Series B Preferred Stock and warrants to purchase an aggregate of 1,000,000 shares of our common stock on the same terms. We expect to use the net proceeds from the private placement to acquire mortgage loans and mortgage-related assets consistent with our investment strategy.

On April 28, 2020, our Board of Directors approved the Third Amended and Restated Management Agreement with our Manager which provides us with the option to pay our management fee with between 50% to 100% cash at our discretion, and pay the remainder in shares of our common stock.

On May 3, 2020, our Board of Directors declared a cash dividend of $0.17 per share to be paid on May 29, 2020 to our common stockholders of record as of May 15, 2020. On March 27, 2020, we paid the dividend of $0.32 per share we previously announced in February 2020 in shares of our common stock (valued based upon the closing price on the record date) in lieu of cash.

Great Ajax Corp. will host a conference call at 5:00 p.m. EST on Tuesday, May 5, 2020 to review our financial results for the quarter. A live Webcast of the conference call will be accessible from the Investor Relations section of our website www.greatajax.com. An archive of the Webcast will be available for 90 days.

About Great Ajax Corp.

Great Ajax Corp. is a Maryland corporation that is a real estate investment trust, that focuses primarily on acquiring, investing in and managing RPLs secured by single-family residences and commercial properties and, to a lesser extent, NPLs. We also originate and acquire loans secured by multi-family residential and smaller commercial mixed use retail/residential properties and acquire multi-family retail/residential and mixed use and commercial properties. We are externally managed by Thetis Asset Management LLC. Our mortgage loans and other real estate assets are serviced by Gregory Funding LLC, an affiliated entity. We have elected to be taxed as a real estate investment trust under the Internal Revenue Code.

Forward-Looking Statements

This press release contains certain forward-looking statements. Words such as “believes,” “intends,” “expects,” “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, many of which are beyond the control of Great Ajax, including, without limitation, risks relating to the impact of the COVID-19 outbreak and the risk factors and other matters set forth in our Annual Report on Form 10-K for the period ended December 31, 2019 filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2020 and, when filed with the SEC, our Quarterly Report on Form 10-Q for the period ended March 31, 2020. The COVID-19 outbreak has caused significant volatility and disruption in the financial markets both globally and in the United States. If COVID-19 continues to spread or the response to contain it is unsuccessful, Great Ajax could experience material adverse effects on its business, financial condition, liquidity and results of operations. Great Ajax undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.


CONTACT:			Lawrence Mendelsohn
			Chief Executive Officer
			Or
			Mary Doyle
			Chief Financial Officer
			Mary.Doyle@aspencapital.com
			503-444-4224

GREAT AJAX CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands except per share amounts)


	Three months ended
	March 31, 2020		December 31, 2019		September 30, 2019		June 30, 2019
	(unaudited)		(unaudited)		(unaudited)		(unaudited)
INCOME:
Interest income	$	27,286	$	27,113	$	27,723	$	28,128
Interest expense	(13,070)		(13,884)		(14,317)		(15,439)
Net interest income	14,216		13,229		13,406		12,689
Provision for credit losses	(5,109)		(561)		(3)		(85)
Net interest income after provision for credit losses	9,107		12,668		13,403		12,604

Income/(Loss) from equity method investments	(1,112)		31		583		257
Gain/(Loss) on sale of mortgage loans	(705)		—		109		7,014
Other income	747		1,017		1,221		828
Total income	8,037		13,716		15,316		20,703

EXPENSE:
Related party expense - loan servicing fees	2,014		2,156		2,197		2,274
Related party expense - management fee	1,799		1,801		2,215		1,652
Loan transaction expense	(103)		16		52		191
Professional fees	805		608		446		634
Real estate operating expense	912		796		1,216		887
Other expense	1,025		985		940		1,219
Total expense	6,452		6,362		7,066		6,857
Loss on debt extinguishment	408		247		—		182
Income before provision for income tax	1,177		7,107		8,250		13,664
Provision for income tax (benefit)	(319)		(12)		27		38
Consolidated net income	1,496		7,119		8,223		13,626
Less: consolidated net income attributable to non-controlling interests	1,096		462		532		599
Consolidated net income attributable to common stockholders	$	400	$	6,657	$	7,691	$	13,027
Basic earnings per common share	$	0.02	$	0.31	$	0.39	$	0.67
Diluted earnings per common share	$	0.02	$	0.31	$	0.36	$	0.56

Weighted average shares – basic	22,070,354		21,083,719		19,751,142		19,169,941
Weighted average shares – diluted	22,189,984		29,487,273		28,200,653		27,732,587

GREAT AJAX CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands except per share amounts)


	March 31, 2020		December 31, 2019
	(unaudited)
ASSETS
Cash and cash equivalents	$	31,179	$	64,343
Cash held in trust	19		20
Mortgage loans, net^(1,2)	1,098,629		1,151,469
Property held-for-sale, net⁽³⁾	10,905		13,537
Rental property, net	1,345		1,534
Investments at fair value⁽⁴⁾	247,372		231,685
Investments in beneficial interests⁽⁵⁾	64,703		57,954
Receivable from servicer	17,322		17,013
Investments in affiliates	28,028		29,649
Prepaid expenses and other assets	38,345		9,637
Total assets	$	1,537,847	$	1,576,841

LIABILITIES AND EQUITY
Liabilities:
Secured borrowings, net^(1,2,6)	$	630,938	$	652,747
Borrowings under repurchase transactions	431,091		414,114
Convertible senior notes, net⁽⁶⁾	111,420		118,784
Management fee payable	1,795		1,634
Accrued expenses and other liabilities	5,329		5,478
Total liabilities	1,180,573		1,192,757

Equity:
Preferred stock $0.01 par value; 25,000,000 shares authorized, none issued or outstanding	—		—
Common stock $0.01 par value; 125,000,000 shares authorized, 22,921,935 shares at March 31, 2020 and 22,142,143 shares at December 31, 2019 issued and outstanding	230		222
Additional paid-in capital	316,762		309,395
Treasury stock	(514)		(458)
Retained earnings	42,749		49,446
Accumulated other comprehensive gain/(loss)	(27,167)		1,277
Equity attributable to stockholders	332,060		359,882
Non-controlling interests⁽⁷⁾	25,214		24,202
Total equity	357,274		384,084
Total liabilities and equity	$	1,537,847	$	1,576,841

___________________________________________________________

(1)Mortgage loans, net include $888.2 million and $908.6 million of loans at March 31, 2020 and December 31, 2019, respectively, transferred to securitization trusts that are variable interest entities (“VIEs”); these loans can only be used to settle obligations of the VIEs. Secured borrowings consist of notes issued by VIEs that can only be settled with the assets and cash flows of the VIEs. The creditors do not have recourse to the primary beneficiary (Great Ajax Corp.). Mortgage loans, net include $16.1 million and $2.0 million of allowance for loan credit losses at March 31, 2020 and December 31, 2019, respectively.

(2)As of March 31, 2020, balances for Mortgage loans, net includes $316.5 million and Secured borrowings, net of deferred costs includes $271.6 million from the 50% and 63% owned joint ventures. As of December 31, 2019, balances for Mortgage loans, net includes $341.8 million and Secured borrowings, net of deferred costs includes $284.8 million from a 50% and 63% owned joint ventures, all of which we consolidate under U.S. Generally Accepted Accounting Principles ("U.S. GAAP.")

(3)Property held-for-sale, net, includes valuation allowances of $2.3 million and $1.8 million at March 31, 2020 and December 31, 2019, respectively.

(4)As of March 31, 2020 and December 31, 2019 Investments at fair value include amortized cost basis of $274.5 million and $230.4 million, respectively, and unrealized losses of $27.2 million and unrealized gains of $1.3 million, respectively.

(5)Investments in beneficial interests includes allowance for credit losses of $7.2 million at March 31, 2020. No allowance for credit losses were recorded as of December 31, 2019.

(6)Secured borrowings and convertible senior notes are presented net of deferred issuance costs.

(7)Non-controlling interests includes $23.4 million at March 31, 2020, from 50% and 63% owned joint ventures. Non-controlling interests includes $22.4 million at December 31, 2019, from a 50% and 63% owned joint ventures, all of which we consolidate under U.S. GAAP.

First Quarter Investor Presentation May 5, 2020

Safe Harbor Disclosure  We make forward-looking statements in this presentation that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, cash flow and plans and objectives. When we use the words “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may” or similar expressions, we intend to identify forward-looking statements.  Statements regarding the following subjects, among others, may be forward-looking: market trends in our industry, interest rates, real estate values, the debt financing markets or the general economy or the demand for and availability of residential and small-balance commercial real estate loans; our business and investment strategy; our projected operating results; actions and initiatives of the U.S. government and changes to U.S. government policies and the execution and impact of these actions, initiatives and policies; the state of the U.S. economy generally or in specific geographic regions; economic trends and economic recoveries; our ability to obtain and maintain financing arrangements; changes in the value of our mortgage portfolio; changes to our portfolio of properties; impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters; our ability to satisfy the real estate investment trust qualification requirements for U.S. federal income tax purposes; availability of qualified personnel; estimates relating to our ability to make distributions to our stockholders in the future; general volatility of the capital markets and the market price of our shares of common stock; and the degree and nature of our competition.  The forward-looking statements included in this presentation are based on our current beliefs, assumptions and expectations of our future performance. Forward-looking statements are not predictions of future events. Our beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are currently known to us or reasonably expected to occur at this time. If a change in our beliefs, assumptions or expectations occurs, our business, financial condition, liquidity and results of operations may vary materially from the forward-looking statements included in this presentation. Forward-looking statements are subject to risks and uncertainties, including, among other things, those resulting from the pandemic caused by the global novel coronavirus outbreak and those described under Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which can be accessed through the link to our Securities and Exchange Commission ("SEC") filings on our website (www.great-ajax.com) or at the SEC's website (www.sec.gov). Other risks, uncertainties and factors that could cause actual results to differ materially from the forward- looking statements included in this presentation may be described from time to time in reports we file with the SEC. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Unless stated otherwise, financial information included in this presentation is as of March 31, 2020. 2

Business Overview  Leverage long-standing relationships to acquire mortgage loans through privately negotiated transactions from a diverse group of customers – Over 90% of our acquisitions since inception have been privately negotiated – Acquisitions made in 301 transactions since inception. Four transactions closed in Q1 2020  Use our manager’s proprietary analytics to price each mortgage pool on an asset-by-asset basis – We own 19.8% of our manager  Adjust individual loan bid price to accumulate clusters of loans in attractive demographic metropolitan areas – Typical acquisition contains 25 – 100 loans with a total market value between $5 – $20 million  Our affiliated servicer services the loans asset-by-asset and borrower-by-borrower – We own 8% and hold warrants to purchase up to an additional 12% of our affiliated servicer  Our objective is to maximize returns for each asset by utilizing a full menu of loss mitigation and asset optimization techniques  Analytics and processes of our manager and servicer enable us to broaden our reach through joint ventures with third-party institutional investors  Use moderate non-mark-to-market leverage 3

Highlights – Quarter Ended March 31, 2020  Formed a joint venture that acquired $184.8 million in unpaid principal balance (“UPB”) of mortgage loans with collateral values of $292.9 million and an aggregate purchase price of $170.4 million. As of March 31, 2020, the joint venture was prefunded with $132.6 million of cash for additional loan purchases of which 677 re-performing mortgage loans ("RPLs") with UPB of $123.2 million closed in April for a purchase price of $114.0 million. We retained $61.3 million of varying classes of related securities issued by the joint venture to end the quarter with $312.1 million of investments in debt securities and beneficial interests  Purchased $0.2 million of non-performing mortgage loans ("NPLs") with UPB of $0.2 million and underlying collateral values of $0.3 million, and 26 RPLs for $1.2 million with UPB of $2.0 million and collateral values of $3.1 million to end the quarter with $1.1 billion in net mortgage loans  Interest income of $27.3 million; net interest income after provision for credit losses of $9.1 million  Overall cost of funds decreased approximately 21 basis points  Net income attributable to common stockholders of $0.4 million  Basic earnings per share (“EPS”) of $0.02  Taxable income of $0.05 per share  Book value per share of $14.37 at March 31, 2020  Collected total cash of $62.4 million from loan payments, sales of real estate owned ("REO") and investments in debt securities and beneficial interests  Held $31.2 million of cash and cash equivalents at March 31, 2020; average daily cash balance for the quarter was $58.6 million  At March 31, 2020, approximately 74% of our portfolio based on UPB had made at least the last 12 out of 12 payments 4

Portfolio Overview – as of March 31, 2020 1 Unpaid Principal Balance Property Value 1% 3% 3% RPL RPL NPL NPL REO 96% 97% $1,207.9 MM $1,930.1 MM RPL: $1,171.2 MM RPL: $1,864.1 MM NPL: $ 36.7 MM NPL: $ 52.8 MM REO & Rental: $ 12.7 MM 1 Includes $351.4 million UPB in RPLs included in joint ventures with third-party institutional investors that are required to be consolidated for GAAP purposes 2 Real estate owned (“REO”) and rental property value is presented at estimated property fair value less expected liquidation costs 5

Portfolio Growth Re-performing Loans UPB 2,500 Property Value Price Millions $1,969 2,000 $1,881 $1,864 1,500 $1,397 $1,427 $1,230 $1,196 $1,167 $1,171 $1,023 $974 1,000 $757 $774 $659 $502 500 $306$330 $226 0 3/31/2015 3/31/2016 3/31/2017 3/31/2018 3/31/2019 3/31/2020  RPL UPB includes $3.65 million of Small Balance Commercial (SBC) loans, which are performing loans. Includes $341.2 million UPB in RPLs included in joint ventures with third- party institutional investors that are required to be consolidated for GAAP purposes  RPL status stays constant based on initial purchase status 6

Portfolio Growth Non-performing Loans 120 UPB $105 Millions $103 Property Value $100 100 $96 Price 80 $77 $69 $61 $62 $59 60 $58 $51 $53 $43 $44 40 $37 $33 $32 $27 20 0 3/31/2015 3/31/2016 3/31/2017 3/31/2018 3/31/2019 3/31/2020  NPL status stays constant based on initial purchase status 7

Portfolio Concentrated in Attractive Markets  Clusters of loans in attractive, densely populated markets  Stable liquidity and home prices  Over 80% of the portfolio in our target markets Portland New York / New Jersey Metro Area Washington DC Metro Area Los Angeles San Diego Phoenix Atlanta Dallas Target Markets Houston Orlando Target States Property Management Tampa Miami, Business Management Ft. Lauderdale, REIT, Servicer & Manager Headquarters W. Palm Beach 8

Portfolio Migration Total Pre 1Q2020 Acquisitions ($ in thousands) Acquisition Current Based on Count UPB Count UPB Liquidated - - 2,424 522,463 Sold - - 980 228,834 24for24 829 150,431 4,105 877,717 12for12 576 121,398 419 90,892 7for7 3,250 728,386 194 40,155 4f4-6f6 1,768 389,846 151 29,690 Less than 4f4 2,444 517,991 572 116,446 REO 34 8,074 76 25,445 NPL 608 141,129 588 125,613 9,509 2,057,255 9,509 2,057,255  24 for 24: Loans that have made at least 24 of the last 24 payments, or for which the full dollar amount to cover at least 24 payments has been made in the last 24 months  12 for 12: Loans that have made at least 12 of the last 12 payments, or for which the full dollar amount to cover at least 12 payments has been made in the last 12 months  7 for 7: Loans that have made at least 7 of the last 7 payments, or for which the full dollar amount to cover at least 7 payments has been made in the last 7 months 9  NPL: <1 full payment in the last three months

Subsequent Events  Acquisitions Closed since 03/31/20201  RPL  UPB: $123.2MM  Collateral Value: $189.9MM  Price/UPB: 92.5%  Price/Collateral Value: 60.0%  677 loans in 1 transaction  A dividend of $0.17 per share, to be paid on May 29, 2020 to common stockholders of record as of May 15, 2020  On April 6, 2020 we closed a private placement of $80 million of preferred stock and warrants to institutional accredited investors pursuant to a securities purchase agreement dated April 3, 2020. We issued 820,000 shares of 7.25% Series A Fixed- to-Floating Rate Preferred Stock and 2,380,000 shares of 5.00% Series B Fixed-to-Floating Rate Preferred Stock, each at a purchase price per share of $25.00 and two series of five-year warrants to purchase an aggregate of 4,000,000 shares of our common stock at an exercise price of $10.00 per share. Each series of warrants includes a put option that allows the holder to sell the warrants to us at a specified put price on or after July 6, 2023. In addition, we granted the purchasers an option to purchase up to an additional 800,000 shares of Series A Preferred Stock and Series B Preferred Stock and warrants to purchase an aggregate of 1,000,000 shares of our common stock on the same terms. 1Acquired in joint ventures with third-party institutional investors 10

Financial Metrics – Excluding consolidation of the portion of securitizations owned by third-party institutional investors* Excluding the consolidation of 2017 D and 2018 C ($ in thousands) Q1-20 Q4-19 Q3-19 Q2-19 Interest Income on Loans 18,696 20,441 21,596 22,353 Provision for credit losses on mortgage loans (1,455) (561) (3) (85) Interest Income on Debt Securities and Beneficial Interests1 4,837 4,203 3,322 3,140 Provision for credit losses on Beneficial Interests (2,818) - - - Average Loans 992,907 1,007,559 1,028,267 1,043,463 Average Loan Yield - ex net of credit losses on mortgage loans 7.7% 8.4% 8.7% 8.8% Average Loan Yield - Net of credit losses on mortgage loans -0.6% -0.2% 0.0% 0.0% Average Loan Yield - Total 7.2% 8.1% 8.7% 8.8% Average Debt Securities and Beneficial Interests 298,304 245,701 198,320 192,129 Average Debt Securities and Beneficial Interests Yield - ex net of credit losses on Beneficial Intersts 6.6% 7.0% 6.9% 6.7% Average Debt Securities and Beneficial Interests Yield - Net of credit losses on Beneficial Interests -3.7% 0.0% 0.0% 0.0% Average Debt Securities and Beneficial Interests Yield - Total 2.9% 7.0% 6.9% 6.7% Average Total Asset Yield 6.1% 7.9% 8.4% 8.5% Total Interest Expense 11,732 12,492 12,873 13,955 Asset Level Interest Expense 9,284 9,927 10,312 11,401 Average Asset Level Debt 957,291 952,748 937,317 983,585 Average Asset Level Debt Cost 3.9% 4.2% 4.5% 4.7% Asset Level Net Interest Margin 2.2% 3.7% 3.9% 3.8% Total Average Debt 1,073,111 1,071,327 1,055,673 1,101,627 Average Asset Yield 7.5% 8.1% 8.4% 8.5% Total Average Debt Cost 4.4% 4.7% 5.0% 5.2% Net Interest Margin Before Provision for Credit Losses 3.0% 3.4% 3.4% 3.3% Provision for Credit Losses -1.3% -0.2% 0.0% 0.0% Total Net Interest Margin 1.7% 3.2% 3.4% 3.3% Non-Interest Operating Expenses/Avg Assets 1.5% 1.5% 1.6% 1.6% ROAA - ex net REO gains and losses and provision for credit losses 2.1% 2.4% 2.7% 4.3% ROAA - Net REO gains and losses and provision for credit losses -1.7% -0.4% -0.3% -0.3% ROAA - Total 0.5% 2.1% 2.4% 4.0% ROAE - ex net REO gains and losses and provision for losses2 8.7% 9.6% 10.9% 18.5% ROAE - Net REO gains and losses and provision for credit losses -6.6% -1.5% -1.1% -1.3% ROAE - Total 2.1% 8.1% 9.9% 17.2% Average Leverage Ratio - Asset Backed 2.7 2.6 2.7 2.9 Average Leverage Ratio - Convertbile Debt 0.3 0.3 0.3 0.3 Average Leverage Ratio - Total 3.0 2.9 3.0 3.2 Ending Leverage Ratio - Asset Backed3 2.9 2.7 2.9 2.9 Ending Leverage Ratio - Convertible Debt 0.3 0.3 0.4 0.4 Ending Leverage Ratio - Total4 3.2 3.0 3.2 3.3 1Interest income on debt securities is net of servicing fee 2Return on average equity for the quarter ended June 30, 2019 includes approximately $5.2 million net gain from an RPL sale, after adjusting for foregone interest income, reduced interest expense and other loan related expenses 3Excludes the impact of consolidating trusts and convertible debt 4Excludes the impact of consolidating trusts *The Company believes these financial metrics provide investors with useful supplemental information relating to the Company’s results of operation and financial performance. These adjusted financial metrics are non-GAAP financial measures and should be considered in addition to, but not as a substitute for, the financial measures prepared in accordance with GAAP as reflected on other slides in this presentation. The following slide provides a reconciliation of these financial metrics to the most comparable GAAP measure. 11

Financial Metrics - Reconciliation of GAAP consolidated financial metrics to non-GAAP financial metrics excluding the portion of securitizations owned by third-party institutional investors Reconciliation of GAAP Consolidated to GAAP Consolidated Excluding the Consolidation of 2017 D and 2018 C Q1-20 Excluding the Q4-19 Excluding the Q3-19 Excluding the Q2-19 Excluding the Q1-20 GAAP Consolidation Consolidation Consolidation of Consolidation of Consolidation of Consolidation of ($ in thousands) Consolidated Impact of 2017 D Impact of 2018 C 2017 D and 2018 C 2017 D and 2018 C 2017 D and 2018 C 2017 D and 2018 C Interest Income on Loans 21,892 1,918 1,278 18,696 20,441 21,596 22,353 Provision for credit losses on mortgage loans (1,893) (131) (307) (1,455) (561) (3) (85) Interest Income on Debt Securities and Beneficial Interests1 4,837 - - 4,837 4,203 3,322 3,140 Provision for credit losses on Beneficial Interests (2,818) - - (2,818) - - - Average Loans 1,135,336 72,451 69,978 992,907 1,007,559 1,028,267 1,043,463 Average Loan Yield - ex net of credit losses on mortgage loans 7.9% -0.2% 0.0% 7.7% 8.4% 8.7% 8.8% Average Loan Yield - Net of credit losses on mortgage loans -0.7% 0.0% 0.1% -0.6% -0.2% 0.0% 0.0% Average Loan Yield - Total 7.3% -0.2% 0.1% 7.2% 8.1% 8.7% 8.8% Average Debt Securities and Beneficial Interests 298,304 - - 298,304 245,701 198,320 192,129 Average Debt Securities and Beneficial Interests Yield - ex net of credit losses on Beneficial Intersts 6.6% 0.0% 0.0% 6.6% 7.0% 6.9% 6.7% Average Debt Securities and Beneficial Interests Yield - Net of credit losses on Beneficial Interests -3.7% 0.0% 0.0% -3.7% 0.0% 0.0% 0.0% Average Debt Securities and Beneficial Interests Yield - Total 2.9% 0.0% 0.0% 2.9% 7.0% 6.9% 6.7% Average Total Asset Yield 6.3% -0.2% 0.0% 6.1% 7.9% 8.4% 8.5% Total Interest Expense 13,070 605 733 11,732 12,492 12,873 13,955 Asset Level Interest Expense 10,622 605 733 9,284 9,927 10,312 11,401 Average Asset Level Debt 1,067,983 59,463 51,229 957,291 952,748 937,317 983,585 Average Asset Level Debt Cost 4.0% 0.0% -0.1% 3.9% 4.2% 4.5% 4.7% Asset Level Net Interest Margin 2.2% -0.2% 0.1% 2.2% 3.7% 3.9% 3.8% Total Average Debt 1,183,803 59,463 51,229 1,073,111 1,071,327 1,055,673 1,101,627 Average Asset Yield 7.7% -0.2% 0.0% 7.5% 8.1% 8.4% 8.5% Total Average Debt Cost 4.5% 0.0% -0.1% 4.4% 4.7% 5.0% 5.2% Net Interest Margin Before Provision for Credit Losses 3.2% -0.2% 0.1% 3.0% 3.4% 3.4% 3.3% Provision for Credit Losses -1.3% 0.0% 0.0% -1.3% -0.2% 0.0% 0.0% Total Net Interest Margin 1.9% -0.2% 0.1% 1.7% 3.2% 3.4% 3.3% Non-Interest Operating Expenses/Avg Assets 1.4% 0.0% 0.0% 1.5% 1.5% 1.6% 1.6% ROAA - ex net REO gains and losses and provision for credit losses 1.9% 0.1% 0.1% 2.1% 2.4% 2.7% 4.3% ROAA - Net REO gains and losses and provision for credit losses -1.5% -0.1% -0.1% -1.7% -0.4% -0.3% -0.3% ROAA - Total 0.4% 0.0% 0.0% 0.5% 2.1% 2.4% 4.0% ROAE - ex net REO gains and losses and provision for losses2 8.7% 0.0% 0.0% 8.7% 9.6% 10.9% 18.5% ROAE - Net REO gains and losses and provision for credit losses -6.6% 0.0% 0.0% -6.6% -1.5% -1.1% -1.3% ROAE - Total 2.1% 0.0% 0.0% 2.1% 8.1% 9.9% 17.2% Average Leverage Ratio - Asset Backed 3.0 (0.2) (0.1) 2.7 2.6 2.7 2.9 Average Leverage Ratio - Convertbile Debt 0.3 - - 0.3 0.3 0.3 0.3 Average Leverage Ratio - Total 3.3 (0.2) (0.1) 3.0 2.9 3.0 3.2 Ending Leverage Ratio - Asset Backed3 3.0 (0.0) (0.1) 2.9 2.7 2.9 2.9 Ending Leverage Ratio - Convertible Debt 0.3 0.0 0.0 0.3 0.3 0.4 0.4 Ending Leverage Ratio - Total4 3.3 (0.0) (0.1) 3.2 3.0 3.2 3.3 (1) Interest income on debt securities is net of servicing fee. (2) Return on average equity for the quarter ended June 30, 2019 includes approximately $5.2 million net gain from an RPL sale, after adjusting for foregone interest income, reduced interest expense and other loan related expenses. 12 (3) Excludes the impact of consolidating trusts and convertible debt. (4) Excludes the impact of consolidating trusts.

Consolidated Statements of Income (Dollars in thousands except per share amounts) (Unaudited) Three months ended March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 (unaudited) (unaudited) (unaudited) (unaudited) INCOME: Interest income $ 27,286 $ 27,113 $ 27,723 $ 28,128 Interest expense (13,070) (13,884) (14,317) (15,439) Net interest income 14,216 13,229 13,406 12,689 Provision for credit losses (5,109) (561) (3) (85) Net interest income after provision for credit losses 9,107 12,668 13,403 12,604 Income/(Loss) from investments in affiliates (1,112) 31 583 257 Gain/(Loss) on sale of mortgage loans (705) - 109 7,014 Other income 747 1,017 1,221 828 Total income 8,037 13,716 15,316 20,703 EXPENSE: Related party expense - loan servicing fees 2,014 2,156 2,197 2,274 Related party expense - management fee 1,799 1,801 2,215 1,652 Loan transaction expense (103) 16 52 191 Professional fees 805 608 446 634 Real estate operating expense 912 796 1,216 887 Other expense 1,025 985 940 1,219 Total expense 6,452 6,362 7,066 6,857 Loss on debt extinguishment 408 247 - 182 Income before provision for income tax 1,177 7,107 8,250 13,664 Provision for income tax (benefit) (319) (12) 27 38 Consolidated net income 1,496 7,119 8,223 13,626 Less: consolidated net income attributable to non- 1,096 462 532 599 controlling interests Consolidated net income attributable to common $ 400 $ 6,657 $ 7,691 $ 13,027 stockholders Basic earnings per common share $ 0.02 $ 0.31 $ 0.39 $ 0.67 Diluted earnings per common share $ 0.02 $ 0.31 $ 0.36 $ 0.56 Weighted average shares – basic 22,070,354 21,083,719 19,751,142 19,169,941 Weighted average shares – diluted 22,189,984 29,487,273 28,200,653 27,732,587 13

Consolidated Balance Sheets (Dollars in thousands except per share amounts) ASSETS March 31, 2020 December 31, 2019 Cash and cash equivalents $ 31,179 $ 64,343 Cash held in trust 19 20 Mortgage loans, net(1,2) 1,098,629 1,151,469 Property held-for-sale, net(3) 10,905 13,537 Rental property, net 1,345 1,534 Investments at fair value(4) 247,372 231,685 Investments in beneficial interests (5) 64,703 57,954 Receivable from servicer 17,322 17,013 Investment in affiliates 28,028 29,649 Prepaid expenses and other assets 38,345 9,637 Total assets $ 1,537,847 $ 1,576,841 LIABILITIES AND EQUITY Liabilities: Secured borrowings, net(1,2,6) $ 630,938 $ 652,747 Borrowings under repurchase transactions 431,091 414,114 Convertible senior notes, net(6) 111,420 118,784 Management fee payable 1,795 1,634 Accrued expenses and other liabilities 5,329 5,478 Total liabilities 1,180,573 1,192,757 Equity: Preferred stock $0.01 par value; 25,000,000 shares authorized, — — none issued or outstanding Common stock $0.01 par value; 125,000,000 shares authorized, 22,921,935 shares at March 31, 2020 and 22,142,143 shares at 230 222 December 31, 2019 issued and outstanding Additional paid-in capital 316,762 309,395 Treasury stock (514) (458) Retained earnings 42,749 49,446 Accumulated other comprehensive gain/(loss) (27,167) 1,277 Equity attributable to stockholders 332,060 359,882 Non-controlling interests (7) 25,214 24,202 Total equity 357,274 384,084 Total liabilities and equity $ 1,537,847 $ 1,576,841 (1) Mortgage loans, net include $888.2 million and $908.6 million of loans at March 31, 2020 and December 31, 2019, respectively, transferred to securitization trusts that are variable interest entities (“VIEs”); these loans can only be used to settle obligations of the VIEs. Secured borrowings consist of notes issued by VIEs that can only be settled with the assets and cash flows of the VIEs. The creditors do not have recourse to the primary beneficiary (Great Ajax Corp.). Mortgage loans, net include $16.1 million and $2.0 million of allowance for loan credit losses at March 31, 2020 and December 31, 2019, respectively. (2) As of March 31, 2020, balances for Mortgage loans, net includes $316.5 million and Secured borrowings, net of deferred costs includes $271.6 million from the 50% and 63% owned joint ventures, respectively. As of December 31, 2019, balances for Mortgage loans, net include $341.8 million and Secured borrowings, net of deferred costs includes $284.8 million from a 50% and 63% owned joint ventures, all of which the Company consolidates under U.S. Generally Accepted Accounting Principles ("U.S. GAAP"). (3) Property held-for-sale, net, includes valuation allowances of $2.3 million and $1.8 million at March 31, 2020 and December 31, 2019, respectively. 14 (4) As of March 31, 2020 and December 31, 2019 Investments at fair value include amortized cost basis of $274.5 million and $230.4 million, respectively, and unrealized losses of $27.2 million and unrealized gains of $1.3 million, respectively. (5) Investments in beneficial interests includes allowance for credit losses of $7.2 million at March 31, 2020. No allowance for credit losses were recorded as of December 31, 2019. (6) Secured borrowings and convertible senior notes are presented net of deferred issuance costs. (7) As of March 31, 2020 and December 31, 2019 non-controlling interests includes $23.4 million and $22.4 million, respectively, from the 50% and 63% owned joint ventures, which the Company consolidates under U.S. GAAP.