XML 40 R23.htm IDEA: XBRL DOCUMENT v3.23.3
Short-Term Debt
 9 Months Ended
Sep. 30, 2023
Debt Disclosure [Abstract]  
Short-Term Debt Short-Term Debt
We enter into repurchase agreements ("repo"), loan warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and major investment banking firms. At September 30, 2023, 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 September 30, 2023 and December 31, 2022.
Table 14.1 – Short-Term Debt
September 30, 2023
(Dollars in Thousands)Number of FacilitiesOutstanding BalanceLimit
Weighted Average Interest Rate (1)
Maturity (2)
Weighted Average Days Until Maturity
Facilities
Residential loan warehouse 4 $548,334 $1,050,000 7.28 %10/2023-5/2024132
Business purpose loan warehouse2 70,424 455,000 8.12 %5/2024-6/2024259
Real estate securities repo
5 237,835 — 6.99 %10/2023-1/202454
Residential MSR warehouse1 48,470 50,000 8.57 %10/202330
HEI warehouse1 126,803 150,000 9.92 %8/2024306
Total Short-Term Debt Facilities13 1,031,866 
Servicer advance financing1 154,127 240,000 7.67 %11/202332
Subordinate securities financing1 126,506 — 5.71 %9/2024358
Promissory notesN/A16,518 — 6.94 %N/AN/A
Convertible notes, netN/A147,637 — 5.63 %7/2024289
Total Short-Term Debt$1,476,654 
December 31, 2022
(Dollars in Thousands)Number of FacilitiesOutstanding BalanceLimit
Weighted Average Interest Rate (1)
MaturityWeighted Average Days Until Maturity
Facilities
Residential loan warehouse 7 $703,406 $2,550,000 6.16 %3/2023 - 12/2023267
Business purpose loan warehouse4 680,100 1,650,000 6.93 %3/2023 - 9/2023179
Real estate securities repo
7 124,909 — 5.22 %1/2023 - 3/202327
HEI warehouse1 111,681 150,000 8.54 %11/2023306
Total Short-Term Debt Facilities19 1,620,096 
Servicer advance financing1 206,510 290,000 6.67 %11/2023305
Promissory notesN/A27,058 — 6.64 %N/AN/A
Convertible notes, netN/A176,015 — 4.75 %8/2023227
Total Short-Term Debt$2,029,679 
(1)Borrowings under our facilities generally are uncommitted and charged interest based on a specified margin over SOFR.
(2)Promissory notes payable on demand to lender with 90-day notice.
The following table below presents the value of loans, securities, and other assets pledged as collateral under our short-term debt at September 30, 2023 and December 31, 2022.
Table 14.2 – Collateral for Short-Term Debt
(In Thousands)September 30, 2023December 31, 2022
Collateral Type
Held-for-sale residential loans$608,649 $775,545 
MSRs (1)
79,809 — 
Business purpose loans 92,350 871,072 
HEI229,625 191,278 
Real estate securities
On balance sheet4,448 72,133 
Sequoia securitizations (2)
51,542 74,170 
Freddie Mac SLST securitizations (2)
214,443 — 
Freddie Mac K-Series securitization (2)
32,904 31,767 
CAFL securitizations (2)
32,317 — 
Total real estate securities owned
335,654 178,070 
Restricted cash and other assets4,128 1,097 
Total Collateral for Short-Term Debt Facilities1,350,215 2,017,062 
Cash15,162 12,713 
Subordinate securities financing169,565 — 
Servicer advances219,813 269,259 
Total Collateral for Short-Term Debt$1,754,755 $2,299,034 
(1)Includes certificated mortgage servicing rights classified as securities on our consolidated balance sheets.
(2)Represents securities we retained from consolidated securitization entities. For GAAP purposes, we consolidate the loans and non-recourse ABS issued from these securitizations.
For the three and nine months ended September 30, 2023, the average balance of our short-term debt facilities was $1.02 billion and $1.14 billion, respectively. At September 30, 2023 and December 31, 2022, accrued interest payable on our short-term debt facilities was $5 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.
In 2019, a subsidiary of Redwood entered into a repurchase agreement providing non-marginable (i.e., not subject to margin calls based solely on the lender's determination, in its discretion, of the market value of the underlying collateral that is non-delinquent) recourse debt financing of certain Sequoia securities as well as securities retained from our consolidated Sequoia securitizations ("Subordinate securities financing" in Table 14.1 above). The financing is fully and unconditionally guaranteed by Redwood, and had an interest rate of approximately 4.21% through September 2022, which increased to 5.71% from October 2022 through September 2023, and will increase to 7.21% from October 2023 through September 2024. The financing facility has a final maturity in September 2024. During the three months ended September 30, 2023, we reclassified this facility from long-term to short-term debt as the maturity date on this facility is within one year.
In connection with our acquisition of Riverbend, we assumed promissory notes that are payable on demand with a 90-day notice from the lender or which may be repaid by us with a 90-day notice. These unsecured, non-marginable, recourse notes were issued in three separate series with fixed interest rates between 6% and 8%.
During the three and nine months ended September 30, 2023, we repurchased $2 million and $66 million, respectively, of convertible debt due in 2023 and 2024, and recorded a $0.02 million gain and a $0.2 million gain on extinguishment, respectively. At September 30, 2023 the outstanding principal balance of our convertible debt due in July 2024 was $148 million.
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 at September 30, 2023.
Table 14.3 – Short-Term Debt by Collateral Type and Remaining Maturities
September 30, 2023
(In Thousands)Within 30 days31 to 90 daysOver 90 daysTotal
Collateral Type
Held-for-sale residential loans$46,844 $314,269 $187,221 $548,334 
Business purpose loans— — 70,424 70,424 
Real estate securities38,786 182,275 143,280 364,341 
MSRs48,470 — — 48,470 
HEI— — 126,803 126,803 
Servicer advances— 154,127 — 154,127 
Total Secured Short-Term Debt Facilities134,100 650,671 527,728 1,312,499 
Promissory notes (unsecured)— 16,518 — 16,518 
Convertible notes, net (unsecured) — — 147,637 147,637 
Total Short-Term Debt$134,100 $667,189 $675,365 $1,476,654