XML 36 R25.htm IDEA: XBRL DOCUMENT
v3.24.3

Debt Obligations, Net | 9 Months Ended
--- | ---
Sep. 30, 2024
Debt Disclosure [Abstract] |
Debt Obligations, Net | Debt Obligations, Net We enter into loan warehouse facilities, repurchase agreements ("repo"), recourse subordinate securities financings, and other forms of collateralized (and generally uncommitted) borrowings with several banks and major investment banking firms. We use debt to finance the acquisition and/or origination of residential consumer and residential investor mortgage loans (including those we acquire or originate in anticipation of sale or securitization), and to finance investments in securities and other investments. Additionally, we use corporate debt obligations to fund other aspects of our business and operations, including the repurchase of shares of our capital stock. At September 30, 2024, we had outstanding agreements on debt obligations with several counterparties and we were in compliance with all of the related covenants. Refer to Note 3 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding these investments. Refer to Note 14 and Note 16 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for additional information regarding our debt obligations. The following tables summarize our debt obligations at September 30, 2024 and December 31, 2023. Table 17.1 – Debt Obligations, Net
|  |  |  | September 30, 2024
(Dollars in Thousands) |  |  |  | Number of Facilities or Issuances |  | Principal Amount |  | Carrying Value |  | Facility Capacity |  | Weighted Average Interest Rate(1) |  | Final Stated Maturity |  | Carrying Value of Collateral
Short-Term Warehouse Facilities and Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential consumer loan warehouse facilities |  |  |  | 7 |  | $ | 1,269,512 |  |  | $ | 1,269,512 |  |  | $ | 2,675,000 |  |  | 6.69 | % |  | 10/2024-5/2025 |  | $ | 1,350,551 |
Residential investor loan warehouse facilities |  |  |  | 3 |  | 277,536 |  | 276,827 |  | 900,000 |  |  | 8.29 | % |  | 6/2025-7/2025 |  | 422,636
Real estate securities repurchase facilities |  |  |  | 6 |  | 185,393 |  | 185,393 |  | — |  |  | 6.45 | % |  | 10/2024-1/2025 |  | 250,416
Residential MSR warehouse facility |  |  |  | 1 |  | 54,306 |  | 54,306 |  | 75,000 |  |  | 8.25 | % |  | 10/2024 |  | 80,392
HEI warehouse facility |  |  |  | 1 |  | 100,302 |  | 100,302 |  | 150,000 |  |  | 9.52 | % |  | 11/2024 |  | 210,288
Servicer advance financing |  |  |  | 1 |  | 156,116 |  | 155,986 |  | 240,000 |  |  | 7.31 | % |  | 12/2024 |  | 212,446
Recourse Subordinate Securities Financing: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
CAFL securities (3) |  |  |  | 1 |  | 269,037 |  | 267,833 |  | N/A |  | 7.54 | % |  | 9/2028 |  | 324,874
Long-Term Warehouse Facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Investor Facilities |  |  |  | 4 |  | 696,671 |  | 695,431 |  | 1,625,000 |  |  | 8.16 | % |  | 10/2025-6/2026 |  | 987,286
Corporate Debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Promissory notes (2) (3) |  |  |  | 3 |  | 13,663 |  | 13,663 |  | — |  |  | 7.02 | % |  | N/A |  | — |
Corporate Secured Revolving Financing Facility |  |  |  | 1 |  | 150,000 |  | 144,281 |  | 250,000 |  |  | 10.02 | % |  | 3/2026 |  | 290,320
5.75% exchangeable senior notes (3) |  |  |  | 1 |  | 156,666 |  | 155,772 |  | N/A |  | 5.75 | % |  | 10/2025 |  | N/A
7.75% convertible senior notes (3) |  |  |  | 1 |  | 207,410 |  | 203,525 |  | N/A |  | 7.75 | % |  | 6/2027 |  | N/A
Trust preferred securities and subordinated notes |  |  |  | 2 |  | 139,500 |  | 138,848 |  | N/A |  | 7.77 | % |  | 1/2037, 7/2037 |  | N/A
9.125% Senior Notes (3) |  |  |  | 1 |  | 60,000 |  | 57,776 |  | N/A |  | 9.13 | % |  | 3/2029 |  | N/A
9.0% Senior Notes (3) |  |  |  | 1 |  | 85,000 |  | 81,991 |  | N/A |  | 9.00 | % |  | 9/2029 |  | N/A
Total Debt Obligations |  |  |  |  |  | $ | 3,821,112 |  |  | $ | 3,801,446 |  |  |  |  |  |  |  |  | $ | 4,129,209 |
|  |  |  | December 31, 2023 |  |
(Dollars in Thousands) |  |  |  | Number of Facilities or Issuances |  | Principal Amount |  | Carrying Value |  | Facility Capacity |  | Weighted Average Interest Rate(1) |  | Final Stated Maturity |  | Carrying Value of Collateral |  |
Short-Term Warehouse Facilities and Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential consumer loan warehouse facilities |  |  |  | 4 |  | $ | 796,537 |  |  | $ | 796,537 |  |  | $ | 1,150,000 |  |  | 7.27 | % |  | 2/2024-12/2024 |  | $ | 907,742 |  |  |
Residential investor loan warehouse facilities |  |  |  | 2 |  | 71,851 |  | 71,719 |  | 455,000 |  | 8.14 | % |  | 5/2024-6/2024 |  | 95,225 |  |
Real estate securities repurchase facilities |  |  |  | 3 |  | 82,622 |  | 82,622 |  | — |  |  | 7.01 | % |  | 1/2024-3/2024 |  | 122,110 |  |
Residential MSR warehouse facility |  |  |  | 1 |  | 47,858 |  | 47,858 |  | 50,000 |  | 8.60 | % |  | 10/2024 |  | 76,560 |  |
HEI warehouse facility |  |  |  | 1 |  | 122,659 |  | 122,659 |  | 150,000 |  | 9.89 | % |  | 8/2024 |  | 237,973 |  |
Servicer advance financing |  |  |  | 1 |  | 154,369 |  | 153,654 |  | 240,000 |  | 7.71 | % |  | 12/2024 |  | 225,345 |  |
Recourse Subordinate Securities Financings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sequoia securities (3) |  |  |  | 1 |  | 124,552 |  | 124,552 |  | N/A |  | 7.21 | % |  | 9/2024 |  | 175,096 |  |
CAFL securities 1 (3) |  |  |  | 1 |  | 101,228 |  | 101,228 |  | N/A |  | 5.71 | % |  | 2/2025 |  | 124,793 |  |
CAFL securities 2 (3) |  |  |  | 1 |  | 57,982 |  | 57,982 |  | N/A |  | 4.75 | % |  | 6/2026 |  | 112,813 |  |
Long Term Warehouse Facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Investor Facilities |  |  |  | 6 |  | 1,023,384 |  |  | 1,021,708 |  |  | 2,350,000 |  |  | 8.14 | % |  | 3/2025-12/2026 |  | 1,327,907 |  |  |
Corporate Debt: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Promissory notes (2) (3) |  |  |  | 3 |  | 16,063 |  | 16,063 |  | N/A |  | 6.97 | % |  | N/A |  | — |  |  |
5.625% convertible senior notes (3) |  |  |  | 1 |  | 142,977 |  | 142,558 |  | N/A |  | 5.63 | % |  | 7/2024 |  | N/A |  |
5.75% exchangeable senior notes (3) |  |  |  | 1 |  | 156,666 |  | 155,138 |  | N/A |  | 5.75 | % |  | 10/2025 |  | N/A |  |
7.75% convertible senior notes (3) |  |  |  | 1 |  | 210,910 |  | 206,032 |  | N/A |  | 7.75 | % |  | 6/2027 |  | N/A |  |
Trust preferred securities and subordinated notes |  |  |  | 2 |  | 139,500 |  | 138,813 |  | N/A |  | 7.90 | % |  | 1/2037, 7/2037 |  | N/A |  |
Total Debt Obligations |  |  |  |  |  | $ | 3,249,158 |  |  | $ | 3,239,123 |  |  |  |  |  |  |  |  | $ | 3,405,564 |  |  |
(1)Variable rate borrowings are based on 1- or 3-month AMERIBOR or SOFR, plus an applicable spread. (2)Promissory notes payable on demand to lender with 90-day notice. (3)Borrowing has a fixed interest rate at period end. During the three months ended September 30, 2024, we terminated two recourse subordinate financing facilities entered into in 2020 and 2021, and entered into a new recourse subordinate financing facility providing non-marginable debt financing of certain securities retained from our consolidated CAFL securitizations. This financing is fully and unconditionally guaranteed by Redwood, with an interest rate of approximately 7.54% through September 2027, increasing to 10.54% from October 2027 through September 2028. This financing facility may be terminated at our option, beginning in September 2026, and has a final stated maturity in September 2028. In March 2024, we entered into a corporate secured revolving financing facility to provide non-marginable recourse debt financing secured by previously unencumbered assets, such as retained Residential Consumer and Residential Investor subordinate securities and other investments, as well as equity in certain operating subsidiaries. This facility has a capacity of $250 million and a two-year term, with a one-year extension option. In January 2024, Redwood issued $60 million of 9.125% Senior Notes due in 2029. The Senior Notes are senior unsecured obligations of Redwood and bear interest at a rate equal to 9.125% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on June 1, 2024. The Senior Notes mature on March 1, 2029. We may redeem the Senior Notes, in whole or in part, at any time on or after March 1, 2026 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest. In June 2024, Redwood issued $85 million of 9.0% Senior Notes due in 2029. The Senior Notes are senior unsecured obligations of Redwood and bear interest at a rate equal to 9.0% per year, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, beginning on September 1, 2024. The Senior Notes mature on September 1, 2029. We may redeem the Senior Notes, in whole or in part, at any time on or after September 1, 2026 at a redemption price equal to 100% of the principal amount redeemed plus accrued and unpaid interest. During the three months ended September 30, 2024, we repaid our 5.625% convertible senior notes and our Sequoia recourse subordinate securities financing in full. During the nine months ended September 30, 2024, we repurchased $4 million par value of our 7.75% convertible senior notes at a discount and recorded a gain on extinguishment of $0.1 million in Realized gains, net on our consolidated statements of income.

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for long-term debt. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 470 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/470/tableOfContent + Details
Name: | us-gaap_LongTermDebtTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration