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Indebtedness | 9 Months Ended
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Sep. 30, 2019
Debt Disclosure [Abstract] |
Indebtedness | 10. Indebtedness Notes Payable
|  |  |  |  |  |  |  |  |  | Successor
|  |  |  |  |  |  |  |  |  | September 30, 2019 |  | December 31, 2018
Advance Facilities |  | Interest Rate |  | Maturity Date |  | Collateral |  | Capacity Amount |  | Outstanding |  | Collateral Pledged |  | Outstanding |  | Collateral pledged
$325 advance facility |  | LIBOR + 1.5% to 6.5% |  | August 2021 |  | Servicing advance receivables |  | $ | 325 |  |  | $ | 233 |  |  | $ | 294 |  |  | $ | 209 |  |  | $ | 284 |
$250 advance facility |  | LIBOR + 1.5% to 2.6% |  | December 2020 |  | Servicing advance receivables |  | 250 |  |  | 142 |  |  | 173 |  |  | 218 |  |  | 255 |
$200 advance facility |  | LIBOR + 2.5% |  | December 2019 |  | Servicing advance receivables |  | 200 |  |  | 64 |  |  | 125 |  |  | 90 |  |  | 149 |
$125 advance facility |  | LIBOR + 1.5% to 7.4% |  | July 2020 |  | Servicing advance receivables |  | 125 |  |  | 74 |  |  | 84 |  |  | 78 |  |  | 89 |
Advance facilities principal amount |  |  |  |  |  | 513 |  |  | $ | 676 |  |  | 595 |  |  | $ | 777 |
Unamortized debt issuance costs |  |  |  |  |  | — |  |  |  |  | — |  |  |
Advance facilities, net |  |  |  | $ | 513 |  |  |  |  | $ | 595 |  |  |
|  |  |  |  |  |  |  |  |  | Successor
|  |  |  |  |  |  |  |  |  | September 30, 2019 |  | December 31, 2018
Warehouse Facilities |  | Interest Rate |  | Maturity Date |  | Collateral |  | Capacity Amount |  | Outstanding |  | Collateral pledged |  | Outstanding |  | Collateral pledged
$1,500 warehouse facility |  | LIBOR + 1.0% |  | June 2020 |  | Mortgage loans or MBS |  | $ | 1,500 |  |  | $ | 970 |  |  | $ | 938 |  |  | $ | — |  |  | $ | — |
$1,200 warehouse facility |  | LIBOR + 1.7% to 3.5% |  | November 12, 2019 |  | Mortgage loans or MBS |  | 1,200 |  |  | 734 |  |  | 779 |  |  | 560 |  |  | 622 |
$1,000 warehouse facility |  | LIBOR + 1.4% to 2.3% |  | September 2020 |  | Mortgage loans or MBS |  | 1,000 |  |  | 521 |  |  | 536 |  |  | 137 |  |  | 140 |
$800 warehouse facility(1) |  | LIBOR + 1.5% to 2.9% |  | April 2020 |  | Mortgage loans or MBS |  | 800 |  |  | 586 |  |  | 643 |  |  | 464 |  |  | 514 |
$750 warehouse facility |  | LIBOR + 1.4% to 2.8% |  | September 2020 |  | Mortgage loans or MBS |  | 750 |  |  | 511 |  |  | 524 |  |  | 119 |  |  | 122 |
$600 warehouse facility |  | LIBOR + 2.3% |  | February 2020 |  | Mortgage loans or MBS |  | 600 |  |  | 214 |  |  | 251 |  |  | 151 |  |  | 168 |
$500 warehouse facility |  | LIBOR + 1.5% to 2.8% |  | November 14, 2019 |  | Mortgage loans or MBS |  | 500 |  |  | 405 |  |  | 474 |  |  | 220 |  |  | 248 |
$500 warehouse facility |  | LIBOR + 1.5% to 3.0% |  | April 2020 |  | Mortgage loans or MBS |  | 500 |  |  | 391 |  |  | 400 |  |  | 187 |  |  | 200 |
$200 warehouse facility |  | LIBOR + 1.5% |  | December 2019 |  | Mortgage loans or MBS |  | 200 |  |  | 91 |  |  | 92 |  |  | — |  |  | — |
$200 warehouse facility |  | LIBOR + 1.2% |  | April 2021 |  | Mortgage loans or MBS |  | 200 |  |  | 91 |  |  | 94 |  |  | 18 |  |  | 19 |
$200 warehouse facility |  | LIBOR + 2.0% |  | January 2020 |  | Mortgage loans or MBS |  | 200 |  |  | 67 |  |  | 94 |  |  | 103 |  |  | 132 |
$200 warehouse facility |  | LIBOR + 1.5% |  | October 2020 |  | Mortgage loans or MBS |  | 200 |  |  | 21 |  |  | 21 |  |  | — |  |  | — |
$50 warehouse facility |  | LIBOR + 2.0% to 6.0% |  | April 2020 |  | Mortgage loans or MBS |  | 50 |  |  | 13 |  |  | 16 |  |  | — |  |  | — |
$40 warehouse facility |  | LIBOR + 3.3% |  | September 2020 |  | Mortgage loans or MBS |  | 40 |  |  | 27 |  |  | 28 |  |  | — |  |  | — |
$40 warehouse facility |  | LIBOR + 3.0% |  | November 29, 2019 |  | Mortgage loans or MBS |  | 40 |  |  | 1 |  |  | 2 |  |  | 1 |  |  | 2 |
$500 warehouse facility(2) |  | LIBOR + 2.0% to 2.3% |  | September 2020 |  | Mortgage loans or MBS |  | — |  |  | — |  |  | — |  |  | 290 |  |  | 299 |
Warehouse facilities principal amount |  | 4,643 |  |  | 4,892 |  |  | 2,250 |  |  | 2,466 |
MSR Facility |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
$400 warehouse facility |  | LIBOR + 3.5% to 6.1% |  | June 2021 |  | MSR |  | 400 |  |  | 150 |  |  | 839 |  |  | 100 |  |  | 928 |
$400 warehouse facility |  | LIBOR + 2.3% |  | December 2020 |  | MSR |  | 400 |  |  | — |  |  | 193 |  |  | — |  |  | 226 |
$150 warehouse facility(1) |  | LIBOR + 2.8% |  | April 2020 |  | MSR |  | 150 |  |  | — |  |  | 121 |  |  | — |  |  | 430 |
$50 warehouse facility |  | LIBOR + 2.8% |  | August 2020 |  | MSR |  | 50 |  |  | 10 |  |  | 84 |  |  | — |  |  | 102 |
|  |  |  |  |  |  |  |  |  | 160 |  |  | 1,237 |  |  | 100 |  |  | 1,686 |
Warehouse and MSR facilities principal amount |  | 4,803 |  |  | $ | 6,129 |  |  | 2,350 |  |  | $ | 4,152 |
Unamortized debt issuance costs |  |  |  |  |  |  |  | (1 | ) |  |  |  | (1 | ) |  |
Warehouse facilities, net |  | $ | 4,802 |  |  |  |  | $ | 2,349 |  |  |
Pledged Collateral: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans and mortgage loans held for investment |  |  |  |  |  |  |  | $ | 3,980 |  |  | $ | 4,119 |  |  | $ | 1,528 |  |  | $ | 1,628 |
Reverse mortgage interests |  |  |  |  |  |  |  | 663 |  |  | 773 |  |  | 722 |  |  | 838 |
MSR |  |  |  |  |  |  |  | 160 |  |  | 1,237 |  |  | 100 |  |  | 1,686 |
(1) | Total capacity amount for this facility is $800 of which $150 is a sublimit for MSR financing.
(2) | This facility was terminated during August 2019.
Unsecured Senior Notes Unsecured senior notes consist of the following:
| Successor
| September 30, 2019 |  | December 31, 2018
$950 face value, 8.125% interest rate payable semi-annually, due July 2023 | $ | 950 |  |  | $ | 950 |
$750 face value, 9.125% interest rate payable semi-annually, due July 2026 | 750 |  |  | 750 |
$600 face value, 6.500% interest rate payable semi-annually, due July 2021(1) | 592 |  |  | 592 |
$300 face value, 6.500% interest rate payable semi-annually, due June 2022 | 206 |  |  | 206 |
Unsecured senior notes principal amount | 2,498 |  |  | 2,498 |
Unamortized debt issuance costs, premium and discount | (34 | ) |  | (39 | )
Unsecured senior notes, net | $ | 2,464 |  |  | $ | 2,459 |
(1) | This note was subsequently paid down by $100 in principal balance in October 2019.
The ratios included in the indentures for the unsecured senior notes are incurrence-based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio. The incurrence-based covenants limit the issuer(s) and restricted subsidiaries ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all their assets or enter into certain transactions with affiliates. The indentures contain certain events of default, including (subject, in some cases, to customary cure periods and materiality thresholds) defaults based on (i) the failure to make payments under the applicable indenture when due, (ii) breach of covenants, (iii) cross-defaults to certain other indebtedness, (iv) certain bankruptcy or insolvency events, (v) material judgments and (vi) invalidity of material guarantees. The indentures for the unsecured senior notes provide that the Company may redeem all or a portion of the notes prior to certain fixed dates by paying a make-whole premium plus accrued and unpaid interest, to the redemption dates. In addition, the Company may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest, to the redemption dates. No notes were repurchased or redeemed during the three and nine months ended September 30, 2019, and two months ended September 30, 2018. During the two months ended September 30, 2018, the Company redeemed $658 in principal of outstanding notes. Additionally, the Company repaid $364 in principal of outstanding notes which matured during the two months ended September 30, 2018. The Predecessor repurchased $60 in principal of outstanding notes during the seven months ended July 31, 2018 resulting in a loss of $2. No notes were repurchased during the one month ended July 31, 2018. Additionally, the indentures provide that on or before certain fixed dates, the Company may redeem (x) in the case of the New Notes, up to 40%, or (y) in the case of the other series of unsecured senior notes, up to 35% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest, to the redemption dates, subject to compliance with certain conditions. As of September 30, 2019, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:
Year Ending December 31, |  | Amount
2019 |  | $ | — |
2020 |  | — |
2021(1) |  | 592 |
2022 |  | 206 |
2023 |  | 950 |
Thereafter |  | 750 |
Total unsecured senior notes principal amount |  | $ | 2,498 |
(1) | This note does not include the subsequent pay down of $100 in principal balance in October 2019.
Other Nonrecourse Debt Other nonrecourse debt consists of the following:
|  |  |  |  |  |  |  |  | Successor
|  |  |  |  |  |  |  |  | September 30, 2019 |  | December 31, 2018
| Issue Date |  | Maturity Date |  | Class of Note |  | Securitized Amount |  | Outstanding |  | Outstanding
Participating interest financing(1) | — |  | — |  | — |  | $ | — |  |  | $ | 4,581 |  |  | $ | 5,607 |
Securitization of nonperforming HECM loans |  |  |  |  |  |  |  |  |  |  |
Trust 2017-2(2) | September 2017 |  | September 2027 |  | A, M1, M2 |  | — |  |  | — |  |  | 231 |
Trust 2018-1 | March 2018 |  | March 2028 |  | A, M1, M2, M3, M4, M5 |  | 232 |  |  | 201 |  |  | 284 |
Trust 2018-2 | August 2018 |  | August 2028 |  | A, M1, M2, M3, M4, M5 |  | 179 |  |  | 161 |  |  | 250 |
Trust 2018-3 | November 2018 |  | November 2028 |  | A, M1, M2, M3, M4, M5 |  | 254 |  |  | 239 |  |  | 326 |
Trust 2019-1 | June 2019 |  | June 2029 |  | A, M1, M2, M3, M4, M5 |  | 347 |  |  | 339 |  |  | — |
Nonrecourse Debt - Legacy(3) | November 2009 |  | October 2039 |  | A |  | — |  |  | — |  |  | 29 |
Other nonrecourse debt principal amount |  |  |  |  |  |  |  |  | 5,521 |  |  | 6,727 |
Unamortized debt issuance costs, premium and discount |  |  |  |  |  |  |  |  | 12 |  |  | 68 |
Other nonrecourse debt, net |  |  |  |  |  |  |  |  | $ | 5,533 |  |  | $ | 6,795 |
(1) | Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios.
(2) | As discussed in Note 5, Reverse Mortgage Interests, Net, Trust 2017-2 was extinguished.
(3) | As discussed in Note 6, Mortgage Loans Held for Sale and Investment, Trust 2009-A, the Company’s legacy portfolio, was collapsed and the related debt was extinguished during September 2019.
Participating Interest Financing Participating interest financing represents the obligation of HMBS pools to third-party security holders. The Company issues HMBS in connection with the securitization of borrower draws and accrues interest on HECM loans. Proceeds are received in exchange for securitized advances on the HECM loan amounts transferred to GNMA, and the Company retains a beneficial interest (referred to as a “participating interest”) in the securitization trust in which the HECM loans and HMBS obligations are held and assume both issuer and servicer responsibilities in accordance with GNMA HMBS program guidelines. Monthly cash flows generated from the HECM loans are used to service the HMBS obligations. The interest rate is based on the underlying HMBS rate with a range of 2.3% to 5.9%. Securitizations of Nonperforming HECM Loans From time to time, the Company securitizes its interests in non-performing reverse mortgages. The transactions provide investors with the ability to invest in a pool of both non-performing HECM loans secured by one-to-four-family residential properties and a pool of REO properties acquired through foreclosure of a deed in lieu of foreclosure in connection with HECM loans that are covered by FHA insurance. The transactions provide the Company with access to liquidity for the non-performing HECM loan portfolio, ongoing servicing fees, and potential residual returns. The transactions are structured as secured borrowings with the reverse mortgage loans included in the consolidated financial statements as reverse mortgage interests and the related financing included in other nonrecourse debt. Interest is accrued at a rate of 2.7% to 6.0% on the outstanding securitized notes and recorded as interest expense in consolidated statements of operations. The HECM securitizations are callable with expected weighted average lives of one to four years. The Company may re-securitize the previously called loans from earlier HECM securitizations to achieve a lower cost of funds. Nonrecourse Debt – Legacy Assets During November 2009, the Predecessor completed the securitization of approximately $222 of Asset-Backed Securities (“ABS”), which was accounted for as a secured borrowing. This structure resulted in the Predecessor and subsequently the Company carrying the securitized mortgage loans in its consolidated balance sheets and recognizing the asset-backed certificates acquired by third parties. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is 7.5%, which is subject to an available funds cap. The trust was called and related debt was extinguished during September 2019. See Note 6, Mortgage Loans Held for Sale and Investment for further information. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $160 at December 31, 2018. The UPB on the outstanding loans was $29 at December 31, 2018 and the carrying value of the nonrecourse debt was $29. Financial Covenants The Company’s credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at the Company’s operating subsidiary, Nationstar Mortgage LLC. The Company was in compliance with its required financial covenants as of September 30, 2019. The most restrictive tangible net worth covenant required the Company to maintain a minimum tangible net worth of at least $682.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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