Corporate Debt

Corporate debt consists of the following (dollars in thousands):



	December 31, 2016				December 31, 2015
	Amortized Cost		Weighted- Average Stated Interest Rate ⁽¹⁾		Amortized Cost		Weighted- Average Stated Interest Rate ⁽¹⁾
2013 Term Loan (unpaid principal balance of $1,416,500 and $1,423,750 at December 31, 2016 and 2015, respectively)	$	1,394,658	4.75	%	$	1,396,884	4.75	%
Senior Notes (unpaid principal balance of $538,662 at December 31, 2016 and 2015, respectively)	529,738		7.875	%	528,337		7.875	%
Convertible Notes (unpaid principal balance of $242,468 and $290,000 at December 31, 2016 and 2015, respectively)	204,604		4.50	%	231,723		4.50	%
Capital leases	—				480
Total corporate debt	$	2,129,000			$	2,157,424

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(1)	Represents the weighted-average stated interest rate, which may be different from the effective rate, which considers the amortization of discounts and issuance costs.

The effective interest rate on corporate debt was 6.64% and 6.56% for the years ended December 31, 2016 and 2015, respectively. The increase in effective interest rate is due primarily to the voluntary payment of the lower rate 2013 Term Loan during 2015 as described below.

The following table provides the contractual maturities (by unpaid principal balance) of corporate debt at December 31, 2016 (in thousands):



	Corporate Debt
2019	256,218
2020	1,402,750
2021	538,662
Total	$	2,197,630

Term Loans and Revolver

The Company has a 2013 Term Loan in the original principal amount of $1.5 billion and a $100.0 million 2013 Revolver. The Company’s obligations under the 2013 Secured Credit Facilities are guaranteed by substantially all of the Company’s subsidiaries and secured by substantially all of the Company’s assets subject to certain exceptions, the most significant of which are the assets of the consolidated Residual and Non-Residual Trusts, the residential loans and real estate owned of the Ginnie Mae securitization pools, and advances of the consolidated financing entities. Refer to the Consolidated Variable Interest Entities section of Note 5 for additional information.

The terms of the 2013 Secured Credit Facilities are summarized in the table below.



Debt Agreement	Interest Rate	Amortization	Maturity/Expiration
2013 Term Loan	LIBOR plus 3.75% LIBOR floor of 1.00%	1.00% per annum beginning 1st quarter 2014; remainder at final maturity	December 18, 2020
2013 Revolver ⁽¹⁾	LIBOR plus 4.50%⁽²⁾	Bullet payment at maturity	December 19, 2018

__________

(1)

Under the 2013 Credit Agreement, in order to borrow in excess of 20% of the committed amount under the 2013 Revolver, the Company must satisfy both a specified Interest Coverage Ratio and a specified Total Leverage Ratio on a pro forma basis after giving effect to the borrowing. As of December 31, 2016, the Company did not satisfy both of these ratios, and as a result the maximum amount the Company would have been able to borrow on the 2013 Revolver was $20.0 million, of which $12.2 million remained available after utilization for issued letters of credit.


(2)	Represents the rate through and including January 1, 2017. After this date, the rate reverted back to LIBOR plus 3.75%.

On August 5, 2016, the Company entered into an amendment to the 2013 Credit Agreement, which, among other things, permanently reduced the aggregate commitments under the 2013 Revolver from $125.0 million to $100.0 million, increased the interest rate on any drawn amounts under the 2013 Revolver from LIBOR plus 3.75% to LIBOR plus 4.50% for the period through and including January 1, 2017, and increased the specified Total Leverage Ratio test (which is tested on a pro forma basis in connection with any requested draw of, and following any draw of, any amounts greater than 20% of the revolving commitments) for the four-quarter period ended June 30 2016 and September 30, 2016. There have been no borrowings under the 2013 Revolver. At December 31, 2016, the Company had outstanding $7.8 million in issued LOCs with remaining availability under the 2013 Revolver of $12.2 million. The commitment fee on the unused portion of the 2013 Revolver is 0.50% per year.

During the year ended December 31, 2015, the Company made a voluntary payment of $50.0 million on the 2013 Term Loan that resulted in a loss on extinguishment of $1.0 million due to the write-off of the related issue costs. During the year ended December 31, 2016, the Company repurchased $7.2 million in principal balance of the 2013 Term Loan for $6.3 million resulting in a gain on extinguishment of $0.9 million, which is recorded in net gains on extinguishment on the consolidated statements of comprehensive loss.

Senior Notes

In December 2013, the Company completed the sale of $575.0 million Senior Notes. The Senior Notes pay interest semi-annually on June 15 and December 15, commencing on June 15, 2014, at a rate of 7.875% per annum, and mature on December 15, 2021.

On October 14, 2014, the Company filed with the SEC a registration statement under the Securities Act so as to allow holders of the Senior Notes to exchange their Senior Notes for the same principal amount of a new issue of notes, or the Exchange Notes, with identical terms, except that the Exchange Notes are not subject to certain restrictions on transfer. The registration statement was declared effective by the SEC on October 27, 2014 and the exchange offer closed on December 2, 2014.

During the year ended December 31, 2015, the Company repurchased Senior Notes with a carrying value of $35.7 million and an unpaid principal balance of $36.3 million for $30.0 million resulting in a gain on extinguishment of $5.7 million, which is recorded in net gains on extinguishment on the consolidated statements of comprehensive loss.

Convertible Notes

In October 2012, the Company closed on a registered underwritten public offering of $290 million aggregate principal amount of Convertible Notes. The Convertible Notes pay interest semi-annually on May 1 and November 1, commencing on May 1, 2013, at a rate of 4.50% per annum, and mature on November 1, 2019.

Prior to May 1, 2019, the Convertible Notes will be convertible only upon specified events including the satisfaction of a sales price condition, satisfaction of a trading price condition or specified corporate events and during specified periods, and, on or after May 1, 2019, at any time. The Convertible Notes will initially be convertible at a conversion rate of 17.0068 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $58.80 per share, which is a 40% premium to the public offering price of the Company’s common stock in the 2012 Common Stock Offering of $42.00. Upon conversion, the Company may pay or deliver, at its option, either cash, shares of the Company’s common stock, or a combination of cash and shares of common stock.

During the year ended December 31, 2016, the Company repurchased Convertible Notes with a carrying value of $39.3 million and unpaid principal balance of $47.5 million for $24.8 million resulting in a gain on extinguishment of $14.5 million, which is recorded in net gains on extinguishment on the consolidated statements of comprehensive loss.

During the years ended December 31, 2016, 2015 and 2014, the Company recorded $24.5 million, $24.6 million and $23.4 million, respectively, in interest expense related to its Convertible Notes, which included $11.2 million, $10.8 million and $9.8 million in amortization of discount, respectively. The effective interest rate of the liability component of the Convertible Notes, which includes the amortization of discount and debt issuance costs, was 11.0% for the year ended December 31, 2016 and 10.6% for the years ended December 31, 2015 and 2014. At December 31, 2016 and 2015, the unamortized discount was $34.7 million and $53.5 million, respectively. The unamortized discount at December 31, 2016 will be recognized over its remaining life of 2.8 years.