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 March 31, 2019, 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 I, Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q and Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2018.

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 March 31, 2019 and December 31, 2018.

Table 13.1 – Short-Term Debt



	March 31, 2019
(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	$	526,341	$	1,425,000	3.96	%	8/2019-03/2020	253
Real estate securities repo⁽¹⁾	9	1,081,079		—		3.53	%	04/2019-06/2019	23
Single-family rental loan warehouse ⁽²⁾	2	37,436		400,000		4.75	%	6/2020-6/2021	505
Residential bridge loan warehouse ⁽²⁾	2	61,593		80,000		5.21	%	11/2019-04/2021	529
Business purpose loan working capital ⁽²⁾	1	7,300		15,000		5.00	%	12/2020	611
Total Short-Term Debt Facilities	18	1,713,749
Servicer advance financing	1	249,557		350,000		4.34	%	11/2019	243
Convertible notes, net	N/A	199,925		—		5.63	%	11/2019	229
Total Short-Term Debt		$	2,163,231



	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


(1)	Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At March 31, 2019, 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 March 31, 2019. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations.

At March 31, 2019 and December 31, 2018, the fair value of held-for-sale residential loans pledged as collateral under our short-term debt facilities was $579 million and $935 million, respectively. At March 31, 2019, the fair value of real estate securities pledged as collateral under our short-term debt facilities was $966 million, and also included $146 million of securities retained from our consolidated Sequoia Choice securitizations as well as $196 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 real estate securities pledged as collateral under our short-term debt facilities was $844 million, and also 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. The fair value of single-family rental and residential bridge loans pledged as collateral under our warehouse facilities was $49 million and $93 million, respectively, at March 31, 2019 and $28 million and $98 million, respectively, at December 31, 2018. Additionally, single-family rental loans with a fair value of $5 million, as well as $7 million of other assets at 5 Arches, served as collateral under the business purpose loan working capital line at March 31, 2019.

For the three months ended March 31, 2019 and 2018, the average balances of our short-term debt facilities were $1.61 billion and $1.37 billion, respectively. At both March 31, 2019 and December 31, 2018, accrued interest payable on our short-term debt facilities was $4 million.

Servicer advance financing consists of non-recourse short-term securitization debt used to finance servicer advance investments. 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 March 31, 2019, the fair value of servicer advances collateralizing the securitization financing was $282 million. At March 31, 2019, the accrued interest payable balance on this financing was $0.4 million and the unamortized capitalized commitment costs were $2 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 March 31, 2019, the accrued interest payable balance on this debt was $4 million. See Note 15 for additional information on our convertible notes.

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 March 31, 2019. At both March 31, 2019 and December 31, 2018, 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 March 31, 2019.

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



	March 31, 2019
(In Thousands)	Within 30 days		31 to 90 days		Over 90 days		Total
Collateral Type
Held-for-sale residential loans	$	—	$	—	$	526,341	$	526,341
Real estate securities	857,877		223,202		—		1,081,079
Single-family rental loans	—		—		37,436		37,436
Residential bridge loans	—		—		61,593		61,593
Business purpose loan working capital	7,300		—		—		7,300
Total Secured Short-Term Debt	865,177		223,202		625,370		1,713,749
Servicer advance financing	—		—		249,557		249,557
Convertible notes, net	—		—		199,925		199,925
Total Short-Term Debt	$	865,177	$	223,202	$	1,074,852	$	2,163,231