Short-Term Debt

We enter into repurchase agreements, bank warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and major investment banking firms. At December 31, 2018, we had outstanding agreements with several counterparties and we were in compliance with all of the related covenants. For additional information about these financial covenants and our short-term debt, see Part II, Item 7 of this Annual Report on Form 10-K under the heading “Risks Relating to Debt Incurred Under Short- and Long-Term Borrowing Facilities.”

The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at December 31, 2018 and December 31, 2017.

Table 13.1 – Short-Term Debt



	December 31, 2018
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate		Maturity	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse ⁽¹⁾	4	$	860,650	$	1,425,000	4.10	%	2/2019-12/2019	178
Real estate securities repo ⁽¹⁾	9	988,890		—		3.47	%	01/2019-03/2019	26
Single-family rental loan warehouse ⁽²⁾	2	22,053		400,000		4.77	%	6/2020-6/2021	560
Residential bridge loan warehouse ⁽²⁾	2	66,327		80,000		5.20	%	11/2019-04/2021	629
Total Short-Term Debt Facilities	17	1,937,920
Servicer advance financing	1	262,740		350,000		4.32	%	11/2019	333
Convertible notes, net	N/A	199,619		—		5.63	%	11/2019	319
Total Short-Term Debt		$	2,400,279



	December 31, 2017
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate		Maturity	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse ⁽¹⁾	4	$	1,039,666	$	1,575,000	3.17	%	1/2018-12/2018	197
Real estate securities repo ⁽¹⁾	9	648,746		—		2.69	%	1/2018-3/2018	28
Total Short-Term Debt Facilities	13	1,688,412
Convertible notes, net	N/A	250,270		—		4.63	%	4/2018	105
Total Short-Term Debt		$	1,938,682


(1)	Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At December 31, 2018, all of these borrowings were under uncommitted facilities and were due within 364 days (or less) of the borrowing date.


(2)	Due to the revolving nature of the borrowings under these facilities, we have classified these facilities as short-term debt at December 31, 2018. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations.

Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At December 31, 2018, all of these borrowings were under uncommitted facilities and were generally due within 364 days (or less) of the borrowing date.

The fair value of held-for-sale residential loans and real estate securities pledged as collateral was $935 million and $844 million, respectively, at December 31, 2018 and $1.15 billion and $788 million, respectively, at December 31, 2017. In addition, at December 31, 2018, the fair value of our real estate securities pledged as collateral included $130 million of securities retained from our consolidated Sequoia Choice securitizations, as well as $229 million and $18 million of securities we owned that were issued by consolidated Freddie Mac SLST and Freddie Mac K-Series securitizations, respectively. At December 31, 2018, the fair value of single-family rental and residential bridge loans pledged as collateral under our warehouse facilities was $28 million and $98 million, respectively. For the years ended December 31, 2018 and 2017, the average balances of our short-term debt facilities were $1.60 billion and $1.08 billion, respectively. At December 31, 2018 and December 31, 2017, accrued interest payable on our short-term debt facilities was $4 million and $2 million, respectively.

Servicer advance financing consists of non-recourse short-term securitization debt used to finance servicer advance investments we made in the fourth quarter of 2018. We consolidate the securitization entity that issued the debt, but the entity is independent of Redwood and the assets and liabilities are not owned by and are not legal obligations of Redwood. At December 31, 2018, the fair value of servicer advances collateralizing the securitization financing was $287 million. At December 31, 2018, the accrued interest payable balance on this financing was $1 million and the unamortized capitalized commitment costs were $3 million.

During the fourth quarter of 2018, $201 million principal amount of 5.625% exchangeable senior notes and $1 million of unamortized deferred issuance costs were reclassified from long-term debt to short-term debt as the maturity of the notes was less than one year as of November 2018. At December 31, 2018, the accrued interest payable balance on this debt was $1 million. See Note 15 for additional information on our convertible notes.

During the second quarter of 2017, $288 million principal amount of 4.625% convertible senior notes and $2 million of unamortized deferred issuance costs were reclassified from long-term debt to short-term debt, as the maturity of the notes was less than one year as of April 2017. Additionally, during the second quarter of 2017, we repurchased $37 million par value of these notes at a premium and recorded a loss on extinguishment of debt of $1 million in Realized gains, net on our consolidated statements of income. In April 2018, we repaid these $250 million convertible notes and all related accrued interest in full.

We also maintain a $10 million committed line of credit with a financial institution that is secured by certain mortgage-backed securities with a fair market value of $4 million at December 31, 2018. At both December 31, 2018 and December 31, 2017, we had no outstanding borrowings on this facility.

Remaining Maturities of Short-Term Debt

The following table presents the remaining maturities of our secured short-term debt by the type of collateral securing the debt as well as our convertible notes at December 31, 2018.

Table 13.2 – Short-Term Debt by Collateral Type and Remaining Maturities



	December 31, 2018
(In Thousands)	Within 30 days		31 to 90 days		Over 90 days		Total
Collateral Type
Held-for sale residential loans	$	—	$	458,955	$	401,695	$	860,650
Real estate securities	764,052		224,838		—		988,890
Single-family rental loans	—		—		22,053		22,053
Residential bridge loans	—		—		66,327		66,327
Total Secured Short-Term Debt	764,052		683,793		490,075		1,937,920
Servicer advance financing	—		—		262,740		262,740
Convertible notes, net	—		—		199,619		199,619
Total Short-Term Debt	$	764,052	$	683,793	$	952,434	$	2,400,279