Financing Arrangements, Residential Mortgage Loans

12 Months Ended

Dec. 31, 2015

Financing arrangements, residential mortgage loans

Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]

Financing Arrangements, Residential Mortgage Loans

Financing Arrangements, Residential Mortgage Loans

On December 16, 2014, the Company entered into a master repurchase agreement, with Deutsche Bank AG, Cayman Islands Branch in an aggregate principal amount of up to $260.0 million, to fund a portion of the purchase price of a pool of distressed residential mortgage loans. On December 14, 2015, the Company amended the master repurchase agreement and decreased the maximum aggregate principal amount to $250.0 million and extended the expiration date of the agreement to December 15, 2016. The outstanding balance on this master repurchase agreement as of December 31, 2015 and December 31, 2014 amounts to approximately $214.5 million and $238.9 million, respectively and bears interest at one-month LIBOR plus 2.50% (2.92% and 2.66% at December 31, 2015 and December 31, 2014, respectively).

On November 25, 2015, the Company entered into a master repurchase agreement with Deutsche Bank AG, Cayman Islands Branch in an aggregate principal amount of up to $100.0 million, to fund the future purchase of residential mortgage loans. The outstanding balance on the master repurchase agreement will bear interest at one-month LIBOR plus 4.0% and expires on May 25, 2017. There was no outstanding balance on this master repurchase agreement as of December 31, 2015.

During the terms of the master repurchase agreements, proceeds from the residential mortgage loans, including the Company's distressed residential mortgage loans will be applied to pay any price differential and to reduce the aggregate repurchase price of the collateral. The financings under the master repurchase agreements are subject to margin calls to the extent the market value of the residential mortgage loans falls below specified levels and repurchase may be accelerated upon an event of default under the master repurchase agreements. The master repurchase agreements contain various covenants, among other things, to maintenance of certain amounts of net worth, liquidity and leverage ratio. The Company is in compliance with such covenants as of February 25, 2016.