8. FINANCING

Committed Loan and Securities Repurchase Facilities

The Company has entered into multiple committed master repurchase agreements in order to finance its lending activities throughout the fiscal year. The Company has entered into four committed master repurchase agreements, as outlined in the table below, with multiple counterparties totaling $1,150,000,000 of credit capacity. Assets pledged as collateral under these facilities are limited to whole mortgage loans or participation interests in mortgage loans collateralized by first liens on commercial properties. The Company’s repurchase facilities include covenants covering net worth requirements, minimum liquidity levels, and maximum leverage ratios. The Company believes it is in compliance with all covenants as of March 31, 2014 and December 31, 2013.

The Company has the option to extend some of the current facilities subject to a number of conditions, including satisfaction of certain notice requirements, no event of default exists, and no margin deficit exists, all as defined in the repurchase facility agreements. The lenders have sole discretion with respect to the inclusion of collateral in these facilities, to determine the market value of the collateral on a daily basis, to be exercised on a good faith basis, and have the right to require additional collateral, a full and/or partial repayment of the facilities (margin call), or a reduction in unused availability under the facilities, sufficient to rebalance the facilities if the estimated market value of the included collateral declines.

On January 15, 2014, the Company amended its term master repurchase agreement with a major U.S. insurance company to finance loans it originates. The material changes from the prior agreement include (i) extending the termination date of the facility for six months from January 24, 2014 to July 24, 2014 and (ii) reducing the maximum aggregate facility amount from $300,000,000 to $150,000,000. The Company opted to reduce the maximum aggregate facility amount under this facility in light of the success that the Company has had using other sources of financing of conduit first mortgage loans, including the Federal Home Loan Bank (“FHLB”), on a long term committed basis.

On February 19, 2014, the Company exercised its right to extend the term of its master repurchase agreement with a major U.S. bank to finance loans it originates for an additional 364 days from the initial termination date of April 8, 2014.

The Company has also entered into a term master repurchase agreement with a major U.S. banking institution to finance CMBS totaling $600,000,000. On October 18, 2013, the Company amended its term master repurchase agreement. The material changes from the prior agreement include (a) extending the termination date of the facility an additional fifteen months from January 25, 2014 to April 30, 2015, (b) reducing the maximum aggregate facility amount from $600,000,000 to $300,000,000 effective as of January 25, 2014, (c) releasing of certain guarantors under the facility and (d) changing the pricing spread for all transactions under the facility occurring after October 18, 2013 to be the greater of (i) a percentage of the credit spread over the relevant benchmark rate and (ii) a fixed amount.

Uncommitted Securities Repurchase Facilities

The Company has also entered into multiple master repurchase agreements with several counterparties collateralized by real estate securities. The borrowings under these agreements have typical advance rates between 60% and 95% of the collateral.

March 31, 2014

								Remaining		Carrying		Fair
Committed		Outstanding		Committed but		Interest Rate(s)		Extension	Eligible	Amount of		Value of
Amount		Amount		Unfunded		at March 31, 2014	Maturity	Options	Collateral	Collateral		Collateral

								Two additional
								twelve month	First mortgage
								periods at	commercial real
$	300,000,000	$	—	$	300,000,000		5/18/2015	Company’s option	estate loans	$	42,193,299	$	42,193,299

								Two additional
								364 day	First mortgage
						Between 2.40%		periods at	commercial real
$	250,000,000	$	8,959,856	$	241,040,144	and 3.04%	4/10/2016	Company’s option	estate loans	$	18,694,318	$	19,091,939

								Two additional
								twelve month	First mortgage
						Between 2.41%		periods at	commercial real
$	450,000,000	$	71,804,918	$	378,195,082	and 3.17%	5/26/2017	Company’s option	estate loans	$	223,612,914	$	223,612,914

									First mortgage
									commercial real
$	150,000,000	$	—	$	150,000,000		7/24/2014	N/A	estate loans	$	—	$	—

$	1,150,000,000	$	80,764,774	$	1,069,235,226					$	284,500,531	$	284,898,152

									Investment grade
									commercial real
$	300,000,000	$	43,492,265	$	256,507,735	1.25%	4/30/2015	N/A	estate securities	$	107,378,953	$	107,378,953

									Investment grade
									commercial real
$	—	$	246,713,000	$	—		Various	N/A	estate securities	$	294,409,237	$	294,409,237

$	1,450,000,000	$	370,970,039	$	1,325,742,961					$	686,288,721	$	686,686,342

December 31, 2013

								Remaining		Carrying		Fair
Committed		Outstanding		Committed but		Interest Rate(s)		Extension	Eligible	Amount of		Value of
Amount		Amount		Unfunded		at December 31, 2013	Maturity	Options	Collateral	Collateral		Collateral

								Two additional
								twelve month	First mortgage
						Between 2.42%		periods at	commercial real
$	300,000,000	$	22,749,015	$	277,250,985	and 2.67%	5/18/2015	Company’s option	estate loans	$	46,084,620	$	46,483,618

								Two additional
								364 day	First mortgage
						Between 2.42%		periods at	commercial real
$	250,000,000	$	28,407,500	$	221,592,500	and 3.04%	4/10/2014	Company’s option	estate loans	$	41,428,429	$	41,518,063

								Two additional
								twelve month	First mortgage
						Between 2.41%		periods at	commercial real
$	450,000,000	$	60,423,328	$	389,576,672	and 3.18%	5/26/2015	Company’s option	estate loans	$	132,160,677	$	132,673,364

									First mortgage
						Between 2.66%			commercial real
$	300,000,000	$	47,732,500	$	252,267,500	and 2.67%	1/24/2014	N/A	estate loans	$	65,350,000	$	65,813,055

$	1,300,000,000	$	159,312,343	$	1,140,687,657					$	285,023,726	$	286,488,100

									Investment grade
						Between 1.26%			commercial real
$	600,000,000	$	88,921,450	$	511,078,550	and 1.27%	4/30/2015	N/A	estate securities	$	110,400,378	$	110,400,378

									Investment grade
						Between 0.42%			commercial real
$	—	$	361,601,000	$	—	and 1.67%	1/17/2014	N/A	estate securities	$	440,721,692	$	440,721,692

$	1,900,000,000	$	609,834,793	$	1,651,766,207					$	836,145,796	$	837,610,170

Borrowings under Credit Agreement

On January 24, 2013, the Company entered into a $50,000,000 credit agreement with one of its multiple committed financing counterparties in order to finance its securities and lending activities (the “Credit Agreement”). The Credit Agreement terminates on January 24, 2015, with an additional one year extension available. As of March 31, 2014 and December 31, 2013, there were no borrowings outstanding under the Company’s Credit Agreement. The Company’s Credit Agreement includes covenants covering net worth requirements, minimum liquidity levels, and maximum leverage ratios. The Company believes it is in compliance with all covenants as of March 31, 2014 and December 31, 2013.

Revolving Credit Facility

On February 11, 2014, the Company entered into a revolving credit facility (the “New Revolving Credit Facility”). The New Revolving Credit Facility provides for an aggregate maximum borrowing amount of $75.0 million, including a $25.0 million sublimit for the issuance of letters of credit. The New Revolving Credit Facility will be available on a revolving basis to finance the Company’s working capital needs and for general corporate purposes. The New Revolving Credit Facility has a three-year maturity, which maturity may be extended by two twelve-month periods subject to the satisfaction of customary conditions, including the absence of default. Interest on the New Revolving Credit Facility is one-month LIBOR plus 3.50% per annum payable monthly in arrears.

The obligations under the New Revolving Credit Facility are guaranteed by the Company and certain of its subsidiaries. The New Revolving Credit Facility is secured by a pledge of the shares of (or other ownership or equity interests in) certain subsidiaries to the extent the pledge is not restricted under existing regulations, law or contractual obligations.

The New Revolving Credit Facility is subject to customary affirmative covenants and negative covenants, including limitations on the incurrence of additional debt, liens, restricted payments, sales of assets and affiliate transactions. In addition, under the New Revolving Credit Facility, LCFH is required to comply with financial covenants relating to minimum net worth, maximum leverage, minimum liquidity, and minimum fixed charge coverage, consistent with our other credit facilities. Our ability to borrow under the New Revolving Credit Facility is dependent on, among other things, LCFH’s compliance with the financial covenants. The New Revolving Credit Facility contains customary events of default, including non-payment of principal or interest, fees or other amounts, failure to perform or observe covenants, cross-default to other indebtedness, the rendering of judgments against the Company or certain of our subsidiaries to pay certain amounts of money and certain events of bankruptcy or insolvency.

As of March 31, 2014, there were no borrowings outstanding under the New Revolving Credit Facility.

Long-Term Financing

During the three months ended March 31, 2014, the Company executed one term debt agreement to finance properties in its real estate portfolio. During the three months ended March 31, 2013, the Company executed seven term debt agreements to finance such real estate. These nonrecourse debt agreements are fixed rate financing at rates ranging from 4.25% to 6.75%, maturing in 2018, 2020, 2021, 2022 and 2023 and totaling $331,936,919 at March 31, 2014 and $291,053,406 at December 31, 2013. These long-term nonrecourse mortgages include net unamortized premiums of $4,998,075 and $3,807,479 at March 31, 2014 and December 31, 2013, respectively, representing proceeds received upon financing greater than the contractual amounts due under the agreements. The premiums are being amortized over the remaining life of the respective debt instruments using the effective interest method. The Company recorded $142,440 and $115,043 of premium amortization, which decreased interest expense, for the three months ended March 31, 2014 and 2013, respectively. The loans are collateralized by real estate of $445,401,248 and $401,262,302 as of March 31, 2014 and December 31, 2013, respectively.

Borrowings from the FHLB

On July 11, 2012, Tuebor, a wholly-owned consolidated subsidiary, became a member of the FHLB and subsequently drew its first secured funding advances from the FHLB. As of March 31, 2014, Tuebor had $933,000,000 of borrowings outstanding (with an additional $472,000,000 of committed term financing available from the FHLB), with terms of overnight to 7 years, interest rates of 0.28% to 2.40%, and advance rates of 57% to 95% of the collateral. Collateral for the borrowings was comprised of $988,459,827 of CMBS and U.S. Agency Securities and $187,904,186 of first mortgage commercial real estate loans. As of December 31, 2013, Tuebor had $989,000,000 of borrowings outstanding (with an additional $416,000,000 of committed term financing available from the FHLB), with terms of overnight to 7 years, interest rates of 0.20% to 2.40%, and advance rates of 57% to 95% of the collateral. Collateral for the borrowings was comprised of $1,013,640,649 of CMBS and U.S. Agency Securities and $276,722,665 of first mortgage commercial real estate loans. Tuebor is subject to state regulations which require that dividends (including dividends to the Company as its parent) may only be made with regulatory approval. However, there can be no assurance that we would obtain such approval if sought. Largely as a result of this restriction, approximately $210.3 of the member’s capital were restricted from transfer to Tuebor’s parent without prior approval of state insurance regulators at March 31, 2014.

Senior Unsecured Notes

On September 14, 2012, LCFH issued $325,000,000 in aggregate principal amount of 7.375% Senior Notes due October 1, 2017 (the “Notes”). The Notes require interest payments semi-annually in cash in arrears on April 1 and October 1 of each year, beginning on September 19, 2012. The Notes are unsecured and are subject to incurrence-based covenants, including limitations on the incurrence of additional debt, restricted payments, liens, sales of assets, affiliate transactions and other covenants typical for financings of this type.

LCFH issued the Notes with Ladder Capital Finance Corporation, as co-issuers on a joint and several basis. Ladder Capital Finance Corporation is a 100% owned finance subsidiary of LCFH with no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the Notes. Ladder Capital Corp and certain subsidiaries of LCFH currently guarantee the obligations under the Notes and the indenture. Ladder Capital Corp is the general partner of LCFH and, through LCFH and its subsidiaries, operates the Ladder Capital business. Ladder Capital Corp has a 51.0% economic interest in LCFH, and has a majority voting interest and controls the management of LCFH as a result of its ability to appoint board members, as of March 31, 2014. As a result, Ladder Capital Corp consolidates the financial results of LCFH and records noncontrolling interest for the economic interest in LCFH held by the Continuing LCFH Limited Partners. In addition, Ladder Capital Corp is subject to federal, state and local income taxes due to its corporate structure. Other than the noncontrolling interest in the operating partnership and federal, state and local income taxes, there are no material differences between Ladder Capital Corp’s combined consolidated financial statements and LCFH’s consolidated financial statements.

The following schedule reflects the Company’s contractual payments under borrowings by maturity:

Period ending December 31,	Borrowings by Maturity

2014 (last 9 months)	$	571,713,000
2015	307,297,183
2016	184,959,856
2017	505,000,000
2018	25,000,000
Thereafter	366,936,919
Total	$	1,960,906,958