Welcome to the second quarter 2009 Resource Capital Corp earnings conference call. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions) I would now like to turn the call over to your host for today’s call, the President and CEO of Resource Capital Corp, Jonathan Cohen. You may proceed.

Thank you for joining the Resource Capital Corp. conference call for the second 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. 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 will turn it back to Jonathan.

First a few highlights. For the quarter ended June 30, 2009, RSO reported net operating income of $9.5 million or $0.39 per share as compared to $10.3 million or $042 per share for the quarter ended June 30, 2008; a decrease of $760,000 or 7%. We announced a dividend of $0.30 per common share for the quarter ended June 30, 2009; $7.5 million in aggregate, paid on July 28, 2009 to stockholders of record as of June 19, 2009. Our economic book value, a non-GAAP measure, was $9.25 as of June 30, 2009 and our GAAP book value was $6.66 per common share, as of June 30, 2009. The quarter reflects the reality of the world. Our continuing conservative stance, as well as a worsening real estate market, an improving bank loan market and a slowing of the worsening of our national economy, not only have we continued to sell assets that we think are diminished in value. Hence, our decision to book reserve this quarter of substance as well as losses on the disbursed bank loans. Though we also continue to delever both through repayments, a total of $114.6 million this quarter, the sale of assets as well as the purchase of our own debt at deep discounts, we purchased a bond from our first commercial real estate CDO at a price of $0.08, 8% a par resulting in a gain of $6.9 million and further deleveraging our portfolio. This opportunity only presented itself due to the liquidation of a financial vehicle and the lack of buyers in the marketplace you could fully understand the value of this security in real-time. Our leverage loan assets outperformed moving from a $70 weighted average price to $80. We continue to see price depreciation after the quarter through July into August as…

Thanks very much, Jonathan. RCC’s commercial mortgage portfolio has a current committed balance of approximately $796 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, 25% mezzanine loans, and 10% B-notes. The collateral base underlying the portfolio continues to be diversified across the major asset categories, in geographically diverse markets, with a portfolio breakdown of 31% multifamily, 22% office, 28% hotel, 13% retail, and 6%; others such as industrial, self-storage, and flex office. As of June 30, there is one $7 million multifamily loan that is currently in the foreclosure process. We remain confident about the ultimate recovery of principle in this situation because even a distressed valuation of the asset exceeds our outstanding loan balance. In addition to the one loan and foreclosure, we have a $10.6 million loan that is been in technical defaults since July. The loan has coverage in excess of 1.3 times and we are working with the borrowers and servicers to resolve the issue as soon as possible. With the exception of the loans that I have highlighted our portfolio of commercial real estate loans continues to be current. Despite the current low level of delinquencies in the portfolio, we remain extremely concerned about market fundamentals in general, and the impact of a weak economy on our portfolio. As you repeatedly heard from me in previous calls, during this period of lower transaction volumes our primary efforts have been focused on asset management activities. While we have not had payment defaults which have resulted in non-performing loan situations, we have borrowers who were delayed in the business plans for their properties. In order to effectuate the lease off or repositioning of the assets, we have worked with borrowers…

Thanks, Dave. I will now give you some statistics on our corporate bank loan portfolio. We have $948 million of bank loans encompassing over 30 industries. Our top industries are healthcare 12%, diversified 8.8%, broadcasting and entertainment 6.6%, printing and publishing 5.9%, and chemicals 5.7%. As of the end of June, our average loan asset yields 2.52% over LIBOR, and our liabilities are costing us 47 basis points over LIBOR. We have been able to buy loans at a substantial discount over the last several quarters and continue to see opportunity on the assets side. Now, I will ask Dave Bryant, our CFO, to walk us through our financials.

Our estimated REIT taxable income for the second quarter of 2009 was $5.3 million or $0.21 per common share. For the second quarter in 2009 our Board declared a dividend of $.30 per common share or in total of $7.50 million. This brings our year-to-date results to $11.4 million of REIT taxable income or $.46 per common share with an associated dividend of $0.60 per common share for a payout ratio of approximately 130%. At June 30, 2009, RCC’s investment portfolio was financed with approximately 1.6 billion of total indebtedness. That included 1.5 billion of CDO senior notes and $51.50 million sourced from our unsecured junior subordinated debentures, related to our two TruPS issuances in 2006. We now have only $3.3 million in a three year non-recourse commercial real estate repurchase facility and a mere $54,000 in other repurchase agreements. We ended the period with $165.9 million in book equity. RCC is borrowings of $1.6 billion had a weighted average interest rate of 1.43% at June 30, 2009, a reflection of very low LIBOR in today's market. After disposing of our equipment leasing portfolio and its associated term facility at par and consistent with our stated philosophy of maximizing match-funding, our investment portfolio is virtually 100% match-funded by long-term borrowings. Our non-recourse commercial real estate repurchase facility has $3.3 million outstanding, down substantially from $16.0 million as March 31, 2009. This facility has approximately $24.6 million in collateral, pledged against the facility for a very conservative advance rate of approximately 13%. This facility is also currently scheduled to amortize and be paid off in full by March 31 of next year. Of note, we continue to pass the critical interest coverage and over-collateralization tests in our two real estate CDO's and three bank loans CLO's. Each of these structures continue…

Thanks, Dave. Again, as I said last quarter, management’s recommendation is that unlike other REITs in our space, which have paid out stock as part of their dividend, our intension is to pay dividends in cash at least in the near future. Of course, this is all subject to the Board’s approval. We have decent liquidity as Dave mentioned $10 million now probably close to $20 million before we pay our dividend next quarter, which is almost $0.80 or $0.90 per share of free cash and we will 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 any questions if there are any.

(Operator Instructions) And our first question comes from the line of Gabe Poggi from FBR Capital Market.

Two quick questions, one on the dividend; just in terms of the trend of your retaxable more income, is that trending kind of below what you've paid up last few quarters? Is there a way for you to make that difference up, if you kept that or does it eventually have to trend more in line with that 25ish lower run rate for re-taxable? The second, I was hoping if you could just provide a little more color on your loan portfolio. Where are you seeing strength categorically, industrially or sectorly if you will? Where are you seeing strength versus some other pockets and I know that the loan market had a huge run over the course of the second quarter and still to-date, but where do you feel really comfortable versus other areas?

I will answer the first question first, the dividend, re-taxable income, the reason our re-taxable income is lower and Dave Bryan will pop in if something is incorrect, is because we actually have been repositioning in our bank loan portfolio. So we’ve been actually actively selling loans, just an example when we sale a loan at [80 and buy a loan in 80], because we think it’s a better credit and demand, hence our credit standards and our CLO. So all those loans even though we were buying and selling at the same price in repositioning the portfolio, the actual sale of the loan becomes a taxable loss for retaxable income. So once we are done doing that, which I think as things calm down and the loan world becomes more normalized in next quarter or two, you should see that go away and retaxable income that will look a little bit more like NOI.

Got you. That’s usually helpful. Thanks.

As far as the strength in the loan market, in the bank loan market, we are seeing strength across the board from, on a ratings basis from the CCC area that was as low as, 20, 30 back up to 50, 60, 70 or even 80 for better names that are going to see their way through this financial debacle all the way up to the B and BB names and I think Gretchen Bergstresser team have done an incredible job, certainly relatively to the world, they have outperformed almost everybody in terms of every metric and I think they are going where they believe are the top quality names and positioning the portfolio to go back to par.

(Operator Instructions). And at this time we are showing no further questions available, Mr. Cohen you may proceed.

Thank you very much we appreciate your support in this very difficult time. We are looking forward to easier times and continuing to perform at this level. Thank you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a great day.