Good day ladies and gentlemen and welcome to the fourth quarter and fiscal year end 2007 Resource Capital Corporation earnings call. My name is Tanya and I will be your coordinator for today. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call Mr. Jonathan Cohen, President and CEO please proceed.

Thank you and thank you for joining the Resource Capital Corporation’s conference call for the fourth quarter of fiscal year ending December 31, 2007. I am Jonathan Cohen President and CEO, Resource Capital Corporation. Before I begin, I would like to ask Porvi Condar our Director of Investor Relations to read the Safe Harbor Statement.

During this conference call, the words believe, anticipate, expect and some other expressions are intended to identify forward-looking statements. Although the Company believes that these forward-looking statements are based on reasonable assumptions, such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from these contained in the forward-looking statements. These risks and uncertainties are discussed in the Company’s reports filed with the Securities and Exchange Commission including such reports as Form 8K, 10Q, 10K and in particular item 1 on the Form 10K report under the title Risk Factor. Listeners are cautioned no to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any of these forward-looking statements. With that, I will turn it back to Jonathan.

Thank you Porvi, first a few highlights for the quarter ended December 31, 2007, Resource Capital Corporation reported adjusted net income of $10.7 million or $0.43 per share-diluted. For the year ended December 31, 2007, RCC reported adjusted net income of 42.7 million or $1.72 per share-diluted. For the quarter ended December 31, 2007, Resource Capital Corporation reported weak taxable income of 11.4 million or $0.46 per share-diluted. For the year ended December 31, 2007, Resource Capital Corporation weak taxable income of $42,400,000 or $1.71 per share-diluted. Credit quality across of commercial real estate portfolio and our commercial finance portfolio were remains strong. We declared and paid a divided of $0.41 for the fourth quarter. In addition, earlier this week we declared our dividend for the quarter ending March 31, 2008 of $0.41 payable on April 20, 2008. We reiterate our guidance for 2008 at $1.64 per of dividends or $0.41 per quarter. Our economic book value, a non-GAAP measure, was $12.25 per share as of December 31, 2007. Our GAAP book, our actual GAAP book value per common share was $10.82 as of December 31, 2007. During this quarter, we did meet general and specific reserves against our assets. We are comfortable with our balance sheet as most assets are match funded. We have recourse at the Company level to under $10 million of short repurchase agreements secured by face value of over $27 million of assets and have over $20 million in cash and availability on our corporate credit lines. With those highlights out of the way, I will now introduce my colleagues and then proceed to dive deeper into the Company, it’s performance and the drivers for successful 2008. With me today are David Bloom, Senior Vice President in charge of real estate lending and David Bryant…

Thanks very much Jonathan. Commercial mortgage portfolio has a current committed balance of approximately $917 million across a well diversified pool of 52 separate loans. Our portfolio of commercial mortgage positions breaks down into components as follows: 66% whole loans 24% mezzanine loans 10% B notes As Jonathan mentioned in his earlier remarks, commercial real estate credit markets continue to pull back in re-pricing that began in the third quarter of 2007. At RCC, we are taking an extremely measured approach to new commercial mortgage originations. During the fourth quarter and through today and the current quarter, we’ve originated approximately $82 million of new loans. One hundred percent of which were self-originated whole loans and we have made future advances on existing loan positions of approximately $20 million. Our collateral base continues to be diversified across the major asset categories in geographically diverse markets with a current portfolio break down as follows: 30% multi family 22% office 24% hotel 17% retail 7% other (such as industrial and self storage) In general, our portfolio of closed commercial mortgage positions is performing extremely well with many of the properties in the portfolio well above our performer underwriting and ahead of schedule. I am pleased to again report that our commercial mortgage portfolio continues to be fully current with no defaults. RCC is a portfolio lender for primarily transitional assets. We self originate new whole loans that generally provide acquisition financing to well capitalized experienced sponsors for the execution of value add transitions tied to very specific asset plans. Our focus has always been on underwriting and structuring loans with strong credit characteristics and sound real estate fundamentals for experienced sponsors During this period of lower transaction volumes, our real estate debt team remains extremely busy. There are 14 real estate debt professionals…

Thank you, Dave. I will now give you some statistics on our corporate bank loan portfolio. We have $931 million in bank loans encompassing over 30 industries. Our top ten industries are healthcare 11.5%, diversified 11%, printing and publishing 6.6%, broadcasting and entertainment 5.6% and chemicals 5.4%. As of the end of February, our average loan asset yields 2.27% almost 2.27% over LIBOR and our liabilities are costing us 47 bases points over LIBOR. We have been able to buy loans at a substantial discount over the last few months and continue to see widening here on the asset side and from a discount margin as well. You might notice, by the way, in our press release, we tried to add a lot more information on it on a more detailed basis on our commercial real estate and other loans. Now I will ask Dave Bryant our CFO to walk us thought the financials.

Thank you Jonathan, our coverage of our financial assets for fiscal year end December 31, 2007. Our estimated re-taxable income for the year was 42.5 million or $1.71 per common share. For the quarter end December 31, our Board declared dividends of $0.41 for common share for a total of 10.4 million. For the year ended December 31, 2007, our Board declared total dividends of $1.62 per common share for a total distribution of 40.7 million, which equates to a payout ratio of approximately 96% of our 2007 estimated REIT income. The dividends distributed in 2007 are an increase of $0.13 over 2006 or approximately 9%. RCC assets increased during the 2007 by 272 million or approximately 15% to 2.1 billion from 1.8 billion in December 2006. This growth is primarily the result of our acquisition of bank loans of 314 million and net growth of 246 million in commercial real estate loans and CMBS. This is offset by the de-consolidated very low interest entity Ischus II and it’s related ABS RMBS portfolio. At year end, RCC’s investment portfolio was financed with approximately 1.8 billion of total indebtedness and included the following: 1.5 billion CDO Senior notes 96.7 million in three-year non recourse commercial real estate purchase facility 91.7 million outstanding other secured term facility 19.7 million other repro agreements We have also 51.5 million from our unsecured junior subordinated debenture related to our two trust issuances in 2006. We ended the period with 271.6 million in book equity. RCC borrowings are approximately 1.8 billion had weighted average interest rate of 5.73% at 12/31/07. It is worth noting that we have since de-levered our repurchase facilities. Our non-recourse commercial real estate facility is currently 66.9 million outstanding with approximately 116.5 million in collateral pledged against that facility for an advance…

Thank you very much and at this point, I will open the telephone call for questions.

(Operator Instructions) Your first call is from the line of Andrew Wessel with J.P. Morgan please proceed.

Good morning, I just have a couple of questions. The first on, you talked about FAS 159 and you had to, obviously, change book value. Are you considering adopting FAS 159 for 2008?

We began it an assessment, Andrew, of the impact of 159 and it is a fair value option, of course, on assets and liabilities and it’s impact on RCC and while we could benefit on a one time basis from the adjustment particularly on our liabilities, it is not likely that we will adopt to do that.

Let me just add something. We’ve done that now since obviously if we did it on our stated book value, whatever, after January 1 would pop up significantly to a number that would be eye popping but we feel like we don’t need to do that and it adds complications.

Then on borrowing, I didn’t write those numbers down quickly enough. Can you break down under liabilities what’s in CDOs and CLOs and then what’s in REPO and secure credit again.

At December 31?

Yes, please.

1.5 billion of CDO Senior notes 96.7 million in three-year commercial real estate facility 91.7 million in equipment leasing facility 19.7 million in other REPO agreements 51.5 million in TRUF issuances

I guess of that debt, that only 19.7 million is on REPO that’s (inaudible) could be recourse on a daily basis?

Exactly and that is down at approximately 9 million as of now and that is secure by $27 million of securities.

Even on a GAAP that is mind blowing. Even if the market wants to write off $9 million and assume that comes our of GAAP book, it still shows the devaluation and stock price might be a little out of control.

We agree.

Another question about the dividends, I know before that it had been $1.68 dividend target for this year based purely on reinvesting in your own, you’ve already played CDOs, and CLOs, are you still targeting that?

No, in this market given the repayment fees et cetera, we are just reiterating that $1.64, which is $0.41 per quarter. We see the LIBOR floor is helping us, the increase in fees from our loans and the decrease in equity comp and the increase in spread from our reinvested portfolio because remember we are investing specifically in loan. Bank loans for instance where we are seeing a constant on all the smaller pre-payment rate but you are buying back loans at $0.80 on the dollar and borrowing money and the CLO at 47 bases points.

Then, last question here just looking at it from a valuation perspective, can you help us think of…the only way I see it, you could see a great decrease in dividend, which obviously the yield is in supporting the stock because I wouldn’t think the market is reflecting that this yield is continuous. I only way I see that that yields could be cut and a dividend could be cut is if you start taking on losses immensely greater than you currently reserved for and that eats into your returns on the equity invested in all these levered bonds and everything else. Is there anything else that I am missing?

No, I think you’re right and we tried to take this quarter we took general reserves and perused our portfolios and put in general reserves right away and otherwise, I think you are right.

Great, thank you very much.

You’re welcome.

Your next call is from the line of Bob Napoli with Piper Jaffray please proceed. Bob Napoli – Piper Jaffray: Good morning, in this day and age of very tight liquidity and crazy credit markets since you do have your funding it seems very well what you have today locked down certainly you could use more funding for growth but your stock is trading so far below book value and you have a 23% dividend yield. I know it seems that maybe the best investments are and you do have a stock buy back out there, it seems like you should be using that a little bit and it certainly seems to be a more attractive use of capital than making new loans. Although new loans are probably pretty attractive today too, but probably can’t compare to buying back some of your stock.

We actually agree with you. Obviously, these are very trying times for real estate companies around the world. Our belief is although we did buy stock under that stock purchase agree permission that the Board gave us, we feel like liquidity of the Company is key and any impact that we would have with the little liquidity that we could use all on buying stock would be not that meaningful. Therefore, I think in the near future meaning the next few months, we are probably not going to be actively buying stock back but we have permission and as things brighten, which we think they will for us, we will reconsider that and hopefully have a chance to take advantage of it. Bob Napoli – Piper Jaffray: As far as adding new assets, the liquidity that you have you will want to probably horde. Essentially, are you going to be trading assets or should we expect your balance sheet to shrink from here or should we expect…

I think that over time it might shrink a little bit but primarily off our term faculties as we don’t reinvest because it doesn’t make that much sense. There we would want to take the capital out and buy back stock. I would say that in our CLOs and CDO of CRE, we have constant prepayments. We have been alerted now on the real estate side of the prepayments. We’ve constant although lower prepayments that normal in both areas but also in the bank loan portfolio. It is just amazing what you can do when you are borrowing money at 47 or 80 bases points over LIBOR and you can put the money out, you know 400, 500, 800, 1,000 over for better quality loans. Bob Napoli – Piper Jaffray: What level of new investment would you expect to make in the first quarter?

For instances, in our bank loans we try to…I don’t have an actual number but I would say it’s probably looking forward from this day, we probably know of 20, 30, 40 million of maybe a little bit more of commercial real estate side coming up. Then, we also know if you just take the numbers I gave you, it’s about 3 to 4% per quarter on our $931 million of loans but all that really makes a difference when you’re trading something that’s paying you LIBOR plus 227 for something that is on a discount margin paying you LIBOR plus 800. Bob Napoli – Piper Jaffray: What is the…800 is probably on the high side? What can you put new money to work in?

I think that on the whole loan side, if we did new originations it’s probably LIBOR plus 400, 450, but I think that if we were buying loans some distressed players that are perfectly good loans, it is probably much higher than that on commercial real estate side. Then on the CLO side with things trading in the 90s or high 80s, if you use 40 years as a term your discount margin would probably be 5 to 600 over, which is very attractive. When we’ve been able to buy loans where before we were buying loans in the B1 area, B2 area we are now in the double B minus area. Bob Napoli – Piper Jaffray: I agree with Andrew that the only way you have a significant in your dividend is through credit so on that and you went through some of the analysis in your portfolio. You did take a $6 million provision this quarter end and looking at the fair market value marks on the back loans, you had a increase in your mark there. I guess I would like to understand a little bit more about the level of the provision and the marks and the bank loans in particular. I think the CMBS is explainable.

On the bank loan side, we had about a $900,000 on a $931 million portfolio of two loans one of which we sold and one which is in default, which is a small loan. We specifically reserved against that and then we took a general provision of a little under $1.9 million. On the leasing side, we took a couple hundred thousand dollars against a couple little leases and that was on the commercial finance side. Bob Napoli – Piper Jaffray: What about the fair market value mark on bank loans?

That’s in our press release. Bob Napoli – Piper Jaffray: It is explained in the press release?

No, the number is in there. Bob Napoli – Piper Jaffray: The number is but I was just looking for a little more color on it.

Generally, it’s a big portfolio, we have a watch list, and many of the names went on the watch list about a week ago. Many of the names on the watch list appear to have stabilized a little bit but we are cautiously watching names on the watch list and we thought this was a fair provision to make sure that we have a channel provision, over time we may increase that. But, right now we feel comfortable there. Bob Napoli – Piper Jaffray: My last question, as far as the ability to get new funding, obviously you must be talking to financing sources weekly, daily huddling or looking. What are you hearing and on what types of other financing programs are you working?

There are people now willing to move assets a lot of the bigger banks are willing to give you some term and low rates and to buy them at the right prices but there is nothing that are that attractive to us. I think that we are still a couple of months away from people saying look I have got to move assets, I want to do business and I am willing to finance these things for you or prices are so good I am willing to finance good real estate fiancé people. We are not seeing much that we like yet. Bob Napoli – Piper Jaffray: Okay, thank you.

Thanks, Bob.

Your next call is from the line of Douglas Harter with Credit Suisse please proceed.

I was wondering if you could talk about the upcoming scheduled maturities and which of those maturities would have extensions.

Probably that’s a little too detailed for this call, but we would be happy to go through that with you. On the commercial real estate side, they constantly roll and they pretty much all roll-ons were two plus and two to three year loans with one plus one or three one-year extensions. We are naturally going to see the rate of those loans go up as they extend. Although as I said, we have had guys come to us and say, hey we are selling our multi-family apartment building to a big company. Hey, we are trying to please you, you have to help me out here LIBOR floor is killing me. I can get a loan from Wells Fargo or somebody. So, there are things happening there but on the state of maturities, there is typically a lot of extensions that are built in that they can pay for. The weighed average maturity of the portfolio on the commercial real estate side is two and a half years.

What I am trying to get at is, you don’t have many loans that are coming due that don’t have any other options in the current market?

No.

Then on the provision, is there any expectation as to when some of those losses might be recognized as that will then impact taxable income and I assume that is factored in?

Only the one loan a little bank loan that we sold, which was the smart thing to do and which we realized in the quarter. Otherwise, we are just looking around the room… Douglas Harter - Credit Suisse: That would be factored into your expectations of the $1.64 dividend and would be quite obviously, what you provisioned for?

Yes.

Great, thank you.

Your next call is from the line of Jeremy Banker of Citi please proceed. Jeremy Banker – Citi: Hi, how are you doing? I was just wondering if you give some color on, keep drilling it down on this credit market story. What do you think is going to turn these markets around? What’s it going to take particularly in the corporate credit side.

I wish I knew; right now we are just focused on our individual portfolio as Dave Bloom said. Working with borrowers and keeping on top of them. Constantly reviewing everything and trying to take action where we can. We will leave the more global stuff to the big wigs at the big banks and the analyst there. From our perspective, we are locked up with our liabilities and we will continue just to do business as is and generate income for our shareholders. Certainly, it isn’t any better than it was when we talked last. Jeremy Banker – Citi: Are any of your loans other breaching loan covenants charging penalty interest?

No. Jeremy Banker – Citi: Lastly, is there any effect…I believe last quarter we talked about cash flow still coming out of that ABS CDO that was de-consolidated this quarter. Are you still receiving cash flow from that CDO?

Yes as of March, we are still receiving cash flow. Jeremy Banker – Citi: Can you say how much that is?

March was about $379,000 and we are predicting about a million. If you look at it per quarter, it’s $0.03 net of per quarter and that’s factored into our thinking. Jeremy Banker – Citi: You still are comfortable on your cash flow triggers related to down grades?

Yes because what’s happening with the CDO is you’re getting a lot of repayments remember this is CDO and then a lot of 03, 04 and 05s as they are downgraded the bonds there are getting prepaid because they are hitting their triggers and therefore, it is actually better to be prepaid and that gives you back those C. We are comfortable for now but obviously, it is a moving situation. We are not that worried about it from a dividend perspective. It is factored into our thinking. Jeremy Banker – Citi: Great, thanks.

Your next call is from the line of Lee Cooperman with Omega Advisors please proceed.

Hi, good morning, one of my questions was raised but I will repeat it. But first someone should take the time to congratulate you guys on doing a very fine job in a treacherous environment not withstanding the price of the stock which is terrible, you produced a fundamental result and that is the most important thing. I congratulate you in a very difficult environment. Second, a couple of questions ago on the repurchase, I would second that recognizing what a very treacherous environment but the way I would encourage you to look at this is you’ve got a portfolio, I think you said of over 50 loans and you feel pretty well diversified. I don’t know whether you can make good, you used the term eye popping as regards to yesterday’s ASB 159 effect, which is a little illusionary. But on a 1082 GAAP book value of 23.3% dividend yield, I would encourage you to look very hard at the advisability of making new loans as opposed to buying into the 50 loans you already have on the books by shrinking the CAP and I know you are aware of that but I just was thinking that. Third question is many companies like yourself have lending platforms that are probably more elaborate than the environment would allow for in terms of activity given how the market’s been freezing up. So, you see much opportunity for consolidation industry where one can drive more efficiency by getting more business in existing platforms. So, either somebody that we could buy or more likely somebody that would want to buy us given our evaluation?

Certainly, all the stocks that I follow are trading at heavy discounts from people who can get to the underlying nature of the loans and understand the cheapness of the liabilities meaning that you can also purchase the liabilities to own more of the underlying assets. I am surprised that there haven’t been more consolidation.

It’s going to happen but once again congratulations, you are doing a very good job in a difficult environment.

Thanks Lee.

(Operator Instructions) We have no other questions at this time.

Okay and thank you very much and we look forward to speaking with you next quarter. Operator :