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Short-Term Debt

3 Months Ended

Mar. 31, 2020

We enter into repurchase agreements, bank warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and investment banking firms. At March 31, 2020, we had outstanding agreements with several counterparties and we were in compliance with all of the related covenants.

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, 2020 and December 31, 2019.

Table 13.1 – Short-Term Debt



	March 31, 2020
(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	$	841,186	$	1,525,000	2.38	%	10/2020-3/2021	312
Business purpose residential loan warehouse ⁽²⁾	6	756,384		1,410,000		3.51	%	12/2020-5/2022	404
Real estate securities repo⁽¹⁾	7	485,147		—		2.77	%	4/2020-6/2020	32
Total Short-Term Debt Facilities	17	2,082,717
Servicer advance financing	1	258,931		400,000		2.57	%	11/2020	244
Total Short-Term Debt		$	2,341,648



	December 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	$	185,894	$	1,425,000	3.23	%	1/2020-10/2020	69
Business purpose residential loan warehouse ⁽²⁾	8	814,118		1,475,000		4.11	%	12/2020-5/2022	489
Real estate securities repo⁽¹⁾	10	1,176,579		—		2.94	%	1/2020-3/2020	23
Total Short-Term Debt Facilities	22	2,176,591
Servicer advance financing	1	152,554		400,000		3.56	%	11/2020	335
Total Short-Term Debt		$	2,329,145


(1)	Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At March 31, 2020 and December 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, 2020. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations.

The following table below presents the value of loans, securities, and other assets pledged as collateral under our short-term debt facilities at March 31, 2020 and December 31, 2019.

Table 13.2 – Collateral for Short-Term Debt



(In Thousands)	March 31, 2020		December 31, 2019
Collateral Type
Held-for-sale residential loans	$	881,607	$	201,949
Business purpose residential loans	908,712		988,179
Real estate securities
On balance sheet	78,909		618,881
Sequoia Choice securitizations ⁽¹⁾	51,026		111,341
Freddie Mac SLST securitizations ⁽¹⁾	307,175		381,640
Freddie Mac K-Series securitizations ⁽¹⁾	22,785		252,284
CAFL securitizations ⁽¹⁾	—		127,840
Total real estate securities owned	459,895		1,491,986
Other assets ⁽²⁾	106,467		16,252
Total Collateral for Short-Term Debt	$	2,356,681	$	2,698,366


(1)	Represents securities we have retained from consolidated securitization entities. For GAAP purposes, we consolidate the loans and non-recourse ABS debt issued from these securitizations.


(2)	In addition to securities that serve as collateral for our securities repo borrowings, we had posted $74 million of cash collateral as margin with our borrowing counterparties and had trade receivables from third parties of $32 million related to securities sold in March 2020, which settled in April 2020.

For the three months ended March 31, 2020 and 2019, the average balances of our short-term debt facilities were $1.74 billion and $1.61 billion, respectively. At March 31, 2020 and December 31, 2019, accrued interest payable on our short-term debt facilities was $4 million and $6 million, respectively.

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, 2020, the fair value of servicer advances, cash and restricted cash collateralizing the securitization financing was $297 million. At March 31, 2020, the accrued interest payable balance on this financing was $0.2 million and the unamortized capitalized commitment costs were $1 million.

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 $3 million at March 31, 2020. At both March 31, 2020 and December 31, 2019, 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, 2020.

Table 13.3 – Short-Term Debt by Collateral Type and Remaining Maturities



	March 31, 2020
(In Thousands)	Within 30 days		31 to 90 days		Over 90 days		Total
Collateral Type
Held-for-sale residential loans	$	—	$	—	$	841,186	$	841,186
Business purpose residential loans	—		—		756,384		756,384
Real estate securities	260,035		225,112		—		485,147
Total Secured Short-Term Debt	260,035		225,112		1,597,570		2,082,717
Servicer advance financing	—		—		258,931		258,931
Total Short-Term Debt	$	260,035	$	225,112	$	1,856,501	$	2,341,648