Why Trump Has More Debt Now Than When He Was President

Forbes

The Republican nominee owes more money today than he ever did during his first presidency, according to a Forbes analysis.  Read the full story on Forbes: https://www.forbes.com/sites/danalexander/2024/10/30/heres-how-much-money-trump-owes-and-who-stands-to-collect/  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00Today on Forbes, here's how much money Trump owes, and who stands to collect.

00:07Donald Trump likes to downplay the amount of money he owes.

00:10Earlier this year, he said, quote,

00:12I've got very low debt on buildings, like this building.

00:16He was standing in the lobby of 40 Wall Street,

00:19a property that appears to be underwater because of its $118 million mortgage,

00:24just one liability in a portfolio with $1.8 billion of them.

00:30Trump reworked his balance sheet after leaving the White House,

00:33paying off more than a half dozen loans.

00:35But three major court decisions collectively

00:38added an estimated $574 million of liabilities to his balance sheet.

00:43He holds roughly $410 million of cash and more than $9 billion

00:48of other assets, including almost $6 billion

00:51worth of shares in his very volatile social media venture,

00:55which he could theoretically liquidate to pay off creditors.

00:59Presented with a list of liabilities, Trump's chief legal officer,

01:03Alan Garton, pointed out that the former president is appealing

01:06the legal judgments and took issue with Forbes' numbers,

01:09noting that they include debt against buildings

01:11where Trump is a limited partner and therefore

01:14would not be personally liable in the event of a default.

01:17Garton also seemed to suggest, nonsensically,

01:20that money owed to members of Trump's clubs

01:22should not be included in the tally because Trump will pay them back

01:26with future income.

01:28Meanwhile, campaign spokesperson Stephen Chung

01:31touted Trump's career successes and suggested that the former president

01:34owes fewer Washington insiders than other politicians.

01:38Chung said, quote,

01:39because of his love of America, he decided to run for the White House

01:43as an outsider not beholden to the establishment.

01:46Whether or not that's true, there's no question that Trump owes money

01:49to plenty of creditors.

01:51Forbes decided to break it all down, explaining when the liabilities come due,

01:55how expensive the interest will be, and who stands to collect the cash.

01:59Here are just a few of Trump's liabilities.

02:02First, his business litigation in the amount of $482 million

02:07owed to the New York attorney general.

02:09The largest liability on Trump's balance sheet is also its biggest question mark.

02:13A judge ordered the former president to pay $454 million

02:17after the New York attorney general sued Trump for lying about his net worth.

02:21Trump is appealing the decision, with big money on the line.

02:25While the litigation moves through the courts,

02:27interest accrues at a rate of 9% a year,

02:30adding more than $3 million a month to Trump's liabilities.

02:34If Trump wins the appeal, though, he could save hundreds of millions of dollars.

02:39The next liability is 555 California Street

02:42in the amount of $360 million owed to JPMorgan Chase.

02:47The former president and his partner, publicly traded Vornado Realty Trust,

02:51refinanced their three-building complex in San Francisco shortly after Trump left office,

02:56replacing a $533 million loan with a $1.2 billion one.

03:01As part of the deal, Trump received an estimated $160 million in cash.

03:06But the partners opted for a variable interest rate,

03:09and Trump did not hedge, at least initially,

03:12leaving him vulnerable when the Federal Reserve started jacking rates to combat inflation.

03:18Trump's share of the project is now barely earning enough to cover his interest expenses,

03:22according to an analysis of investor filings.

03:25The good news for Trump?

03:26He is a limited partner in the deal,

03:28which means he would not be personally liable if there were a default.

03:33Another liability is 1290 Avenue of the Americas

03:36in the amount of $285 million owed to JPMorgan Chase, Bank of Montreal, and Citigroup.

03:43Trump and Vornado also refinanced this tower in New York City,

03:47again going with a variable interest rate.

03:49The partners ended up hedging in November 2023

03:52by purchasing something known as an interest rate cap,

03:55doling out $63 million to limit their interest rate to 2.62% until November 2025.

04:02They hedged at the wrong time, though,

04:05locking in rates just as they were finally starting to decline.

04:09As a limited partner, Trump does not control the day-to-day operations of the project

04:13and has less downside if things devolve.

04:16For full coverage and to see the whole list of Trump's debt liabilities,

04:20check out Dan Alexander's piece on Forbes.com.

04:24This is Kieran Meadows from Forbes.

04:27Thanks for tuning in.

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