Good day, ladies and gentlemen, and welcome to the first quarter 2009 Resource Capital Corp. Earnings Call. My name is Dan, and I’ll be your coordinator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions]. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to your host for today’s call, Mr. Jonathan Cohen, President and CEO. Please proceed.

Thank you. Thank you for joining the Resource Capital Corp. conference call for the first quarter of 2009. I am Jonathan Cohen, President and CEO of Resource Capital. Before I begin, I would like to ask Purvi Kamdar, our Director of Investor Relations, to read the Safe Harbor statement.

Thank you, Jonathan. When used in this conference call, the words, ‘believes’, ‘anticipates’, ‘expects’, and similar 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 SEC, including its reports on Form 8-K, 10-Q and 10-K, and in particular, Item 1 on the Form 10-K report under the title “Risk Factors.” Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date hereof. The Company undertakes no obligation to update any of these forward-looking statements. And with that, I’ll turn it back to Jonathan.

Thank you, Purvi. First, a few highlights. For the quarter ended March 31, 2009, Resource Capital reported net operating income of 10.2 million or $0.42 per share diluted. RCC reported REIT taxable income, a non-GAAP measure, of 6.1 million or $0.25 per share diluted for the first quarter ended March 31, 2009 as compared to 12.1 million or $0.48 per share diluted for the first quarter ended March 31, 2008, a decrease of 6 million or 49%. This decrease was mostly due to the timing of tax losses, and Dave Bryant, our Chief Financial Officer, later in this call will explain this phenomena. We declared and paid a dividend of $0.30 per common share for the quarter ended March 31, 2009, 7.5 million in aggregate, which was paid on April 28, 2009 to stockholders of record as of March 31, 2009. Our economic book value, a non-GAAP measure, was $9.74 per common share, and our GAAP book value was $6.81 per common share, both as of March 31, 2009. Given the economic environment, we determined that we should take a substantial provision of $5 million on a specific loan in our commercial real estate portfolio, where we decided to terminate a loan participation agreement. As for syndicated bank loans, as we have always done each quarter, we looked at the companies that we had lent to, and took reserves against any loan that we felt the borrower may have liquidity issues within three to six months. We then applied a very conservative recovery rate for the loan. We reviewed our entire portfolio using this methodology. As a result, we increased our bank loan allowances by 2.9 million. We also sold 10 bank loan positions for a loss of $9 million in an effort to manage rating agency downgrades in our…

Thanks, Jonathan. RCC’s commercial mortgage portfolio has a current committed balance of approximately $820 million across a diverse and granular pool of 46 separate loans. Our portfolio of commercial mortgage positions is in components as follows: 66% whole loans, 24% mezzanine loans, and 10% B-notes. The collateral base underlying the portfolios continues to be diversified across the major asset categories in geographically diverse markets, with a portfolio breakdown of 32% multifamily, 21% office, 27% hotel, 14% retail, and 6% others such as industrial, self-storage, and flex office. After the termination of the loan participation agreement that Jonathan mentioned, our commercial mortgage portfolio continues to be current with the exception of one $7 million multifamily loan that is less than 30 days delinquent. We are in discussions with the borrower of the one small delinquent loan, and feel quite comfortable about a full recovery, because even a distressed valuation of the asset exceed their outstanding loan balance. Despite the current low level of delinquencies in our portfolio, 85 basis points, we remain extremely concerned about market fundamentals in general and the impact of a weak economy on our portfolio. We continue to be in regular direct communication with our borrowers and have bolstered routine asset management functions, which include monthly re-underwriting of property cash flows, monitoring the progress of capital expenditures, leasing and other upgrade plans, as well as stressing loan exit scenarios based on current property values. As you have repeatedly heard from me in previous calls, during this period of lower transaction volumes, our primary efforts have focused on asset management activities. While we have not had payment defaults which have resulted in non-performing loan situations, we have had borrowers who were delayed in the lease up or repositioning of assets, and we have made modifications to their loans…

Thanks, Dave. I will now give you some statistics on our corporate bank loan portfolio. We have 962 million of bank loans encompassing over 30 industries. Our top industries are healthcare, diversified, broadcasting and entertainment, printing and publishing, and chemicals. As of the end of March, our average loan asset yields 2.48% over LIBOR, and our liabilities are costing us 47 basis points over LIBOR. We’ve been able to buy loans at a substantial discount over the last several quarters and continue to see widening here on assets side. Now, I will ask Dave Bryant, our CFO, to walk us through the financials.

Thank you, Jonathan. Our estimated REIT taxable income for the first quarter of 2009 was 6.1 million or $0.25 per common share. REIT taxable income includes losses on bank loans of approximately 4 million realized for tax purposes and sold during the March 2009 quarter. Please note that these bank loan losses had already been provided for at the year-end 2008 for GAAP purposes. We also had a non-recurring transaction in the 2008 quarter from the gain on extinguishment of debt where we bought a CDO note payable at a discount of approximately 1.8 million. This gain of 1.8 million, coupled with the bank loan tax losses of 4 million, accounts for the bulk of the $6 million decline in REIT income from Q1 ‘08 to Q1 ‘09. For the first quarter in 2009 our Board declared a dividend of $0.30 per common share for total outlay of 7.5 million. At March 31, 2009, RCC’s investment portfolio was financed with approximately 1.7 billion of total indebtedness and included 1.5 billion of CDO senior notes, 88.7 million of outstanding under a secured term facility, 16 million in a three-year non-recourse commercial real estate repurchase facility, and a mere 36,000 in other repurchase agreements. In addition, we have 51.5 million sourced from our unsecured junior subordinated debentures related to our two TruPS issuances in 2006. We ended the period with 169.5 million in book equity. RCC’s borrowings of 1.7 billion had a weighted average interest rate of 1.79% at March 31st, a reflection of very low LIBOR in today’s market. Consistent with our stated philosophy of maximizing match-funding, our investment portfolio was 92% match-funded by long-term borrowings, and 7% from term borrowings, with a remaining life of 12 months, with some remaining extension options. Our non-recourse commercial real estate purchase facility now…

Thanks, Dave. Again, as I said last quarter, management’s recommendation is that unlike other REITs in our sector which have paid out stock as part of their dividend or their entire dividend, our intention is to pay dividend in cash at least in the near future. Of course, this is subject to the Board’s approval. We have fine liquidity and we’ll continue to build cash and position ourselves defensively to protect our book value and our cash flow. Thanks for participating in the call. Now, I will open the call for questions if there are any.

[Operator Instructions]. Your first question comes from the line of Gabe Poggi from FBR. Please proceed.

Good. Hey, can you give us an update kind of on credit from quarter end to-date? I mean the market has rallied significantly. I believe there hasn’t been a fundamental change but in underlying CRE performance, but just wanted to hear from you guys is kind of March 31st to now how things have performed? Are you seeing the same green shoot, so to speak, that people are talking about? And then also, what are your thoughts kind of on the TALF extension to five years, thoughts on just -on TALF and potential impact to the CRE market?

On the first question, we’re seeing the same credit we mentioned every credit that I think that we’ve identified that has any issues. We are about to do a transaction which changes around a few of the CRE loans which will be a great enhancement I think to our CRE, CDO test, and we’re just continuing to try to work with the structures. On the credit side, no we haven’t seen any deterioration in our borrowers since the end of the quarter. Just to clarify something, on the commercial bank loan side, we are not continuing to see widening on the assets side. The last month, month-and-a-half has seen incredible move up in prices as was I think documented in the New York Times and the Wall Street Journal today. Loans have rallied considerably as our portfolio and we continue to look at that as an opportunity both as loans that we have move up to be able to sell them and to build par within our structures. Gretchen Bergstresser and the team are doing phenomenally well, and we’re actually mentioned by a major investment bank as having the lowest defaults of any CLO or loan manager out there. So, we’re quite proud of what we’re doing on that side of the house as well as on the real estate house where they’re really working incredibly hard with borrowers. Each situation is different. But I would say, generally speaking, we continue to have a cautiously optimistic view of our portfolio and nothing has changed since the end of the quarter. As far the TALF is concerned, we do think over time that will be a great savior of one of the ways that the CMBS world will be saved. Unfortunately, new originations of CMBS will be very difficult to occur without banks and other players spending nine months to a year, aggregating portfolios. But certainly, this is a great help to us. We think it helps our borrowers long-term. But we also see it as a great opportunity with the lack of lending that’s out there, as we don’t have any short-term liabilities to be able to take money within the CDOs that we have and be able to redeploy that at incredible spreads when we’re borrowing for the next five years or so at incredibly low rates.

Got you. One other quick follow-up on, you mentioned about how on the bank loan side, there has been incredible tightening recently. Has there been a lot of volume in that market or is it lot of secondary volume? Are people beginning to move? Is paper moving more freely or has it just been a tightening just a better bid of paper?

My understanding is that there has been decent volume, especially in the flow names and in the bigger loans.

Right.

But I’d have to really look into whether or not our portfolio is moving up due to lack of volume and tightening. But of course, I would say on the way down that was probably due to lack of trading not people selling.

[Operator Instructions]. At this time, there are no further questions in queue. I would now like to turn the call back over to Mr. Cohen for closing remarks.

Once again, we appreciate your support and we’re working very hard here to try to build this company in a difficult market. Thanks again for your support.

Thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.