Muddy Waters has argued that U.S. real estate finance company Blackstone Mortgage Trust is exposed to a “perfect macro storm” of rising interest rates and office vacancies that could wipe out its entire $4 billion market value.

In a 51-slide presentation Wednesday, Muddy Waters predicted that Blackstone Mortgage Trust, which provides loans for the ailing commercial real estate sector, will face $2.5 billion to $4.5 billion of losses in its $23 billion portfolio, which would be in addition to the company’s existing loss provisions.

Muddy Waters alleged that interest rate swaps and ‘‘manipulated risk ratings / loss provisions have obscured serious deterioration’’ in the company’s loan book but argued that is about to change as an estimated $16 billion of swaps expire over the next year.

This will force the New York-listed mortgage trust to cut its dividend in the second half of 2024, wrote Muddy Waters, which believes that 70% to 75% of the company’s U.S. borrowers are presently unable to cover interest expense from property cash flows absent interest rate swaps. Muddy Waters expects a dividend cut of between 33% to 85%.

“Blackstone’s business has numerous problems and a lot of rot in its book that has been completely hidden to date,” Muddy Waters founder Carson Block told delegates at the Sohn Conference in London on Wednesday. “It’s at a real risk of a liquidity crisis and we think it’s going to have to substantially cut its dividend.”

Blackstone Mortgage Trust shares closed down 8% Wednesday at $20.68, giving it a market capitalization of nearly $3.6 billion.