Long-Term Debt

3 Months Ended

Mar. 31, 2020

Refer to our Annual Report on Form 10-K for the year ended December 31, 2019 for a full description of our long-term debt.

FHLBC Borrowings

At March 31, 2020, $1.37 billion of advances were outstanding under our FHLBC borrowing agreement, with a weighted average interest rate of 1.31% and a weighted average maturity of approximately five years. At December 31, 2019, $2.00 billion of advances were outstanding under this agreement, which were classified as long-term debt, with a weighted average interest rate of 1.88% and a weighted average maturity of six years. During the three months ended March 31, 2020, we repaid $632 million of our FHLBC borrowings. At March 31, 2020, total advances under this agreement were secured by residential mortgage loans with a fair value of $1.43 billion, single-family rental loans with a fair value of $248 million, and $1 million of restricted cash. This agreement also requires our subsidiary to purchase and hold stock in the FHLBC in an amount equal to a specified percentage of outstanding advances. At March 31, 2020, our subsidiary held $43 million of FHLBC stock that is included in Other assets in our consolidated balance sheets.

The following table presents maturities of our FHLBC borrowings by year at March 31, 2020.

Table 15.1 – Maturities of FHLBC Borrowings by Year



(In Thousands)	March 31, 2020
2024	$	470,171
2025	481,686
2026	415,824
Total FHLBC Borrowings	$	1,367,681

Subordinate Securities Financing Facilities

In 2019, a subsidiary of Redwood entered into a repurchase agreement providing non-mark-to-market recourse debt financing of certain Sequoia securities as well as securities retained from our consolidated Sequoia Choice securitizations. In the first quarter of 2020, a subsidiary of Redwood entered into a second repurchase agreement with similar terms to provide non mark-to-market recourse debt financing of certain securities retained form our consolidated CAFL securitizations. The financing is fully and unconditionally guaranteed by Redwood, with an interest rate of approximately 4.21% through February 2023. The financing facility may be terminated, at our option, in February 2023, and has a final maturity in February 2025, provided that the interest rate on amounts outstanding under the facility increases between March 2023 and February 2025.

At March 31, 2020, we had borrowings under these facilities totaling $287 million, net of $2 million of deferred issuance costs, for a carrying value of $286 million. At March 31, 2020, the fair value of real estate securities pledged as collateral under these long-term debt facilities was $258 million, which included $155 million of Sequoia securities and securities retained from our Sequoia Choice securitizations and $103 million of securities retained from our consolidated CAFL securitizations, respectively.

Secured Revolving Debt Facility

In the first quarter of 2020, a subsidiary of Redwood entered into a secured revolving debt facility agreement collateralized by MSRs and certificated mortgage servicing rights. Borrowings under this facility will accrue interest at per annum rates equal to one-month LIBOR plus 2.75% through January 2021, with an increase in rate between February 2021 and the maturity of the facility in January 2022. This facility has an aggregate maximum borrowing capacity of $50 million. Borrowings under this facility totaled $30 million at March 31, 2020. At March 31, 2020, $49 million of MSRs and certificated servicing rights were pledged as collateral under this facility.

Convertible Notes

At March 31, 2020, we had $201 million principal amount outstanding of 5.75% exchangeable senior notes due 2025. At March 31, 2020, the accrued interest payable balance on this debt was $6 million and the unamortized deferred issuance costs were $6 million.

At March 31, 2020 we had $200 million principal amount outstanding of 5.625% convertible senior notes due 2024. At March 31, 2020, the accrued interest payable on this debt was $2 million, the unamortized deferred issuance costs were $4 million, and the debt discount was $1 million.

At March 31, 2020, we had $245 million principal amount outstanding of 4.75% convertible senior notes due 2023. At March 31, 2020, the accrued interest payable balance on this debt was $1 million and the unamortized deferred issuance costs were $4 million.

Trust Preferred Securities and Subordinated Notes

At March 31, 2020, we had trust preferred securities and subordinated notes outstanding of $100 million and $40 million, respectively. At both March 31, 2020 and December 31, 2019, the accrued interest payable balance on our trust preferred securities and subordinated notes was $1 million.