6. SECURED DEBT AGREEMENTS

Our secured debt agreements included revolving repurchase facilities, the GE portfolio acquisition facility, and asset-specific financings. The following table details our secured debt agreements ($ in thousands):


	Secured Debt Agreements
	Borrowings Outstanding
	March 31, 2016			December 31, 2015
Revolving repurchase facilities	$	3,252,405		$	2,858,714
GE portfolio acquisition facility		2,919,946			3,161,291
Asset-specific financings		157,034			111,746

Total secured debt agreements	$	6,329,385		$	6,131,751

Deferred financing costs⁽¹⁾		(17,726	)		(15,646	)

Net book value of secured debt	$	6,311,659		$	6,116,105

(1)	Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

Revolving Repurchase Facilities

The following table details our revolving repurchase facilities ($ in thousands):


	March 31, 2016
	Maximum		Collateral		Repurchase Borrowings
Lender	Facility Size⁽¹⁾		Assets⁽²⁾		Potential⁽³⁾		Outstanding		Available⁽³⁾
Wells Fargo⁽⁴⁾	$	1,172,000	$	1,286,632	$	1,005,043	$	871,485	$	133,558
Bank of America		750,000		847,304		666,275		618,944		47,331
JP Morgan⁽⁵⁾		762,500		796,344		638,390		564,605		73,785
MetLife		695,945		767,290		594,369		466,107		128,262
Citibank⁽⁶⁾		537,500		590,281		455,716		377,251		78,465
Morgan Stanley⁽⁷⁾		359,450		387,317		301,005		298,082		2,923
Société Générale⁽⁸⁾		453,520		69,914		55,931		55,931		—

	$	4,730,915	$	4,745,082	$	3,716,729	$	3,252,405	$	464,324


	December 31, 2015
	Maximum		Collateral		Repurchase Borrowings
Lender	Facility Size⁽¹⁾		Assets⁽²⁾		Potential⁽³⁾		Outstanding		Available⁽³⁾
Wells Fargo⁽⁴⁾	$	1,172,000	$	1,044,860	$	817,562	$	685,485	$	132,077
Bank of America		750,000		840,884		665,861		618,944		46,917
JP Morgan⁽⁵⁾		787,047		864,630		689,705		596,533		93,172
MetLife		750,000		593,273		462,849		324,587		138,262
Citibank⁽⁶⁾		537,500		604,781		461,532		370,194		91,338
Morgan Stanley⁽⁷⁾		370,400		273,280		212,050		209,038		3,012
Société Générale⁽⁸⁾		437,320		67,416		53,933		53,933		—

	$	4,804,267	$	4,289,124	$	3,363,492	$	2,858,714	$	504,778

(1)	Maximum facility size represents the largest amount of borrowings available under a given facility once sufficient collateral assets have been approved by the lender and pledged by us.

(2)	Represents the principal balance of the collateral assets.

(3)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each revolving credit facility.

(4)	As of both March 31, 2016 and December 31, 2015, the Wells Fargo maximum facility size was composed of a general $1.0 billion facility size and $172.0 million of additional capacity related solely to a specific asset with a repurchase date of July 30, 2016.

(5)

As of March 31, 2016, the JP Morgan maximum facility size was composed of a general $500.0 million facility size, under which U.S. Dollars and British Pound Sterling borrowings are contemplated, and $262.5 million of additional capacity related solely to a specific asset with a repurchase date of January 9, 2018. As of December 31, 2015, the JP Morgan maximum facility was composed of general $250.0 million facility size plus a general £153.0 million ($226.7 million) facility size provided under a related agreement that contemplated U.S. Dollars and British Pound Sterling borrowings and, $262.5 million of additional capacity related solely to a specific asset with a repurchase date of January 9, 2018, and additional capacity of £32.3 million ($47.8 million) on the £153.0 million facility.

(6)	As of both March 31, 2016 and December 31, 2015, the Citibank maximum facility size was composed of a general $500.0 million facility size and $37.5 million of additional capacity related solely to a specific asset with a repurchase date of October 9, 2017.

(7)	The Morgan Stanley maximum facility size represents a £250.0 million facility size which was translated to $359.5 million as of March 31, 2016, and $370.4 million as of December 31, 2015.

(8)	The Société Générale maximum facility size represents a €400.0 million facility size which was translated to $453.5 million as of March 31, 2016, and $437.3 million as of December 31, 2015.

The weighted-average outstanding balance of our revolving repurchase facilities was $3.1 billion for the three months ended March 31, 2016. As of March 31, 2016, we had aggregate borrowings of $3.3 billion outstanding under our revolving repurchase facilities, with a weighted-average cash coupon of LIBOR plus 1.83% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.03% per annum, and a weighted-average advance rate of 79.2%. As of March 31, 2016, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.3 years.

The weighted-average outstanding balance of our revolving repurchase facilities was $2.8 billion for the three months ended December 31, 2015. As of December 31, 2015, we had aggregated borrowings of $2.9 billion outstanding under our revolving repurchase facilities, with a weighted-average cash coupon of LIBOR plus 1.82% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.04% per annum, and a weighted-average advance rate of 79.1%. As of December 31, 2015, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.4 years.

Borrowings under each facility are subject to the initial approval of eligible collateral loans by the lender and the maximum advance rate and pricing rate of individual advances are determined with reference to the attributes of the respective collateral loan.

During the three months ended March 31, 2016, we extended the maturity date of our $750.0 million revolving repurchase facility with Bank of America to May 21, 2021 (inclusive of two one-year extension options which may be exercised at our sole discretion).

The following table outlines the key terms of our revolving repurchase facilities as of March 31, 2016:

Lender

Rate⁽¹⁾

Guarantee⁽²⁾

Advance Rate⁽³⁾

Margin Call⁽⁴⁾

Currency

Term/Maturity

Wells Fargo

L+1.78%

25%

79.5%

Collateral marks only

Term matched⁽⁵⁾

Bank of America

L+1.69%

50%

79.5%

Collateral marks only

May 21, 2021⁽⁶⁾

JP Morgan

L+1.80%

25%

80.4%

Collateral marks only

$ / £

January 7, 2018

MetLife

L+1.76%

50%

78.5%

Collateral marks only

February 24, 2021⁽⁷⁾

Citibank

L+1.92%

25%

77.7%

Collateral marks only

Term matched⁽⁵⁾

Morgan Stanley

L+2.35%

25%

79.1%

Collateral marks only

£ / €

March 3, 2017

Société Générale

L+1.60%

25%

80.0%

Collateral marks only

£ / €

Term matched⁽⁵⁾

(1)

Represents weighted-average cash coupon based on borrowings outstanding. In instances where our borrowings are denominated in currencies other than the U.S. Dollar, interest accrues at a rate equivalent to a margin plus a base rate other than 1-month USD LIBOR, such as 3-month GBP LIBOR, 3-month EURIBOR, or 3-month CDOR.

(2)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our revolving repurchase facilities are non-recourse to us.

(3)	Represents weighted-average advance rate based on the outstanding principal balance of the collateral assets pledged.

(4)	Margin call provisions under our revolving repurchase facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.

(5)	These revolving repurchase facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.

(6)	Includes two one-year extension options which may be exercised at our sole discretion.

(7)	Includes five one-year extension options which may be exercised at our sole discretion.

GE Portfolio Acquisition Facility

During the second quarter of 2015, concurrently with our acquisition of the GE portfolio, we entered into an agreement with Wells Fargo to provide us with secured financing for the acquired portfolio. As of March 31, 2016, this facility provided for $3.1 billion of financing, of which $2.9 billion was outstanding and an additional $133.9 million was available to finance future loan fundings. The GE portfolio acquisition facility is non-revolving and consists of a single master repurchase agreement providing for both (i) asset-specific borrowings for each collateral asset as well as (ii) a sequential pay advance feature.

Asset-Specific Borrowings

The asset-specific borrowings under the GE portfolio acquisition facility were advanced at a weighted-average rate of 80% of our purchase price of the collateral assets and will be repaid pro rata from collateral asset repayment proceeds. The asset-specific borrowings are currency matched to the collateral assets and accrue interest at a rate equal to the sum of (i) the applicable base rate plus (ii) a margin of 1.75%, which will increase to 1.80% and 1.85% in year four and year five, respectively. As of March 31, 2016, those borrowings were denominated in U.S. Dollars, Canadian Dollars, British Pounds Sterling, and Euros. The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options. We guarantee obligations under the GE portfolio acquisition facility in an amount equal to the greater of (i) 25% of outstanding asset-specific borrowings, and (ii) $250.0 million. We had outstanding asset-specific borrowings of $2.9 billion and $3.1 billion under the GE portfolio acquisition facility as of March 31, 2016 and December 31, 2015, respectively.

Sequential Pay Advance

The GE portfolio acquisition facility also included a sequential pay advance feature that provided for $237.2 million of borrowings, representing an additional 5% advance against each collateral asset pledged under the facility. As of March 31, 2016, the sequential pay advance borrowings under the GE portfolio acquisition facility had been fully repaid. As of December 31, 2015, we had outstanding sequential pay advance borrowings of $40.7 million. Borrowings under the sequential pay advance accrued interest at a rate equal to the sum of (i) 30-day LIBOR plus (ii) a margin of 3.10%. The sequential pay advance was denominated in U.S. Dollars and was repaid from collateral loan principal repayments, after repayment of the related asset-specific borrowing. The sequential pay advances each had a maturity date that was one year from the date of funding, and we had guaranteed 100% of outstanding borrowings of the sequential pay advance.

Asset-Specific Financings

During the three months ended March 31, 2016, we entered into two asset-specific financings providing an additional $232.4 million of credit capacity. The following table details statistics for our asset-specific financings ($ in thousands):


	March 31, 2016						December 31, 2015
	Financing Agreements			Collateral Assets			Financing Agreements			Collateral Assets
Number of loans		4			4			2			2
Principal balance⁽¹⁾	$	157,034		$	214,941		$	111,746		$	154,192
Book value	$	154,751		$	211,292		$	111,061		$	153,542
Weighted-average cash coupon⁽²⁾		L+2.70	%		L+5.22	%		L+2.52	%		L+5.27	%
Weighted-average cost / all-in yield⁽²⁾		L+3.12	%		L+5.84	%		L+2.88	%		L+5.83	%

(1)	With the exception of $13.2 million related to one asset-specific financing, we do not guarantee the obligations under these agreements.

(2)

These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, cost / all-in yield includes the amortization of deferred origination fees / financing costs.

The weighted-average outstanding balance of our asset-specific financings was $141.4 million for the three months ended March 31, 2016 and $224.8 million for the three months ended December 31, 2015.

Debt Covenants

Each of the guarantees related to our secured debt agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.40 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $1.9 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to March 31, 2016; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 83.33% of our total assets. As of March 31, 2016 and December 31, 2015, we were in compliance with these covenants.

Subsequent Events

On April 4, 2016, we entered into a $125.0 million full recourse revolving credit agreement with Barclays which is designed to finance first mortgage originations for up to six months as a bridge to term financing or syndication. Advances under the credit agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan. The initial maturity date of the facility is April 4, 2018 and is subject to two one-year extension options, exercisable at our option.

On April 22, 2016, we increased the maximum facility size of our revolving repurchase facility with MetLife by $304.1 million to $1.0 billion and extended the maturity date (inclusive of five one-year extension options, exercisable at our option) to April 22, 2022.