Borrowings

We finance the majority of our investment portfolio through repurchase agreements, secured loans and exchangeable senior notes. The following tables summarize certain characteristics of our borrowings at March 31, 2018 and December 31, 2017. Refer to Note 8 - "Collateral Positions" for collateral pledged under our repurchase agreements and secured loans.



$ in thousands	March 31, 2018
				Weighted
		Weighted		Average
		Average		Remaining
	Amount	Interest		Maturity
	Outstanding	Rate		(days)
Repurchase Agreements:
Agency RMBS	10,864,430	1.88	%	26
CMBS	1,482,869	2.97	%	13
Non-Agency RMBS	882,571	3.09	%	24
GSE CRT	681,267	3.02	%	26
Total Repurchase Agreements	13,911,137	2.13	%	25
Secured Loans	1,650,000	1.88	%	2,227
Total Borrowings	15,561,137	2.10	%	259



$ in thousands	December 31, 2017
				Weighted
		Weighted		Average
		Average		Remaining
	Amount	Interest		Maturity
	Outstanding	Rate		(days)
Repurchase Agreements:
Agency RMBS	11,111,755	1.58	%	25
CMBS	1,396,330	2.61	%	9
Non-Agency RMBS	915,225	2.77	%	31
GSE CRT	657,491	2.78	%	24
Total Repurchase Agreements	14,080,801	1.82	%	25
Secured Loans	1,650,000	1.52	%	2,317
Exchangeable Senior Notes ⁽¹⁾	143,410	5.00	%	74
Total Borrowings	15,874,211	1.82	%	263


(1)	The carrying value of exchangeable senior notes was $143.2 million as of December 31, 2017. The carrying value was net of unamortized debt issuance costs of $179,000 as of December 31, 2017.

The following table shows the aggregate amount of maturities of our outstanding borrowings:



$ in thousands	As of
Borrowings maturing within:	March 31, 2018
4/1/2018 - 3/31/2019	13,911,137
4/1/2019 - 3/31/2020	300,000
4/1/2020 - 3/31/2021	100,000
4/1/2021 - 3/31/2022	—
4/1/2022 - 3/31/2023	—
Thereafter	1,250,000
Total	15,561,137

The following tables summarize certain characteristics of our repurchase agreements and secured loans at March 31, 2018 and December 31, 2017.



March 31, 2018
$ in thousands	Amount Outstanding	Percent of Total Amount Outstanding		MBS and GSE CRT Pledged as Collateral ⁽¹⁾
Repurchase Agreement Counterparties:
HSBC	1,948,586	12.5	%	2,057,152
ING Financial Markets	1,411,676	9.1	%	1,489,621
RBC	1,098,363	7.1	%	1,329,727
E D & F Man Capital Markets	1,033,231	6.6	%	1,094,262
Industrial and Commercial Bank of China	987,568	6.3	%	1,042,653
Mirae Asset Securities	914,219	5.9	%	968,612
MUFG Securities	855,183	5.5	%	934,365
Citigroup	772,117	5.0	%	903,677
Amherst Pierpont Securities	571,116	3.7	%	612,022
JP Morgan	435,886	2.8	%	512,237
KGS-Alpha Capital Markets	435,707	2.8	%	467,214
South Street Securities	413,073	2.7	%	441,763
Societe Generale	379,575	2.4	%	482,370
BNP Paribas Securities	328,194	2.1	%	363,539
Goldman Sachs	311,477	2.0	%	405,701
Mizuho Securities	293,858	1.9	%	312,521
Guggenheim Liquidity Services	285,860	1.8	%	302,122
Natixis Securities	277,765	1.8	%	310,830
Bank of Nova Scotia	275,727	1.8	%	287,766
All other counterparties ⁽²⁾	881,956	5.6	%	1,050,432
Total Repurchase Agreement Counterparties	13,911,137	89.4	%	15,368,586
Secured Loans Counterparty:
FHLBI	1,650,000	10.6	%	1,916,895
Total	15,561,137	100.0	%	17,285,481


(1)	Amount pledged as collateral is measured at fair value as described in Note 2 - "Summary of Significant Accounting Policies" included in the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2017.


(2)	Represents amounts outstanding with seven counterparties.



December 31, 2017
$ in thousands	Amount Outstanding	Percent of Total Amount Outstanding		MBS and GSE CRT Pledged as Collateral ⁽¹⁾
Repurchase Agreement Counterparties:
HSBC	1,745,684	11.2	%	1,839,411
ING Financial Markets	1,482,603	9.4	%	1,571,061
RBC	1,144,856	7.3	%	1,375,285
Industrial and Commercial Bank of China	1,038,844	6.6	%	1,102,543
E D & F Man Capital Markets	1,028,437	6.5	%	1,085,429
Mirae Asset Securities	958,756	6.1	%	1,018,664
MUFG Securities	865,201	5.5	%	936,071
Citigroup	724,094	4.6	%	841,977
Amherst Pierpont Securities	722,080	4.6	%	764,713
KGS-Alpha Capital Markets	461,098	2.9	%	491,313
JP Morgan	451,941	2.9	%	523,590
Societe Generale	386,737	2.5	%	495,093
BNP Paribas Securities	348,340	2.2	%	388,091
South Street Securities	332,623	2.1	%	354,689
Goldman Sachs	324,152	2.1	%	419,713
Mizuho Securities	310,835	2.0	%	330,555
Guggenheim Liquidity Services	306,081	1.9	%	322,452
Bank of Nova Scotia	289,705	1.8	%	301,715
Natixis Securities	275,764	1.8	%	302,291
All other counterparties ⁽²⁾	882,970	5.5	%	1,058,759
Total Repurchase Agreement Counterparties	14,080,801	89.5	%	15,523,415
Secured Loans Counterparty:
FHLBI	1,650,000	10.5	%	1,927,496
Total	15,730,801	100.0	%	17,450,911


(1)	Amount pledged as collateral is measured at fair value as described in Note 2 - "Summary of Significant Accounting Policies" included in the consolidated financial statements of our Annual Report on Form 10-K for the year ended December 31, 2017.


(2)	Represents amounts outstanding with seven counterparties.

Repurchase Agreements

Repurchase agreements bear interest at a contractually agreed upon rate and have maturities ranging from one month to twelve months. Repurchase agreements are accounted for as secured borrowings since we maintain effective control of the financed assets. Repurchase agreements are subject to certain financial covenants. We were in compliance with these covenants at March 31, 2018.

Our repurchase agreement collateral ratio (MBS and GSE CRTs pledged as collateral/Amount Outstanding) was 110% as of March 31, 2018 (December 31, 2017: 110%).

Secured Loans

Our wholly-owned captive insurance subsidiary, IAS Services LLC, is a member of the FHLBI. As a member of the FHLBI, IAS Services LLC has borrowed funds from the FHLBI in the form of secured loans.

As of March 31, 2018, IAS Services LLC had $1.65 billion in outstanding secured loans from the FHLBI. These secured loans have floating rates that are based on the three-month FHLB swap rate plus a spread. For the three months ended March 31, 2018, IAS Services LLC had weighted average borrowings of $1.65 billion with a weighted average borrowing rate of 1.68% and a weighted average maturity of 6.1 years.

The Federal Housing Finance Agency’s ("FHFA") final rule governing Federal Home Loan Bank membership (the "FHFA Rule") was effective on February 19, 2016. The FHFA Rule permits existing captive insurance companies, such as IAS Services LLC, to remain members until February 2021. New advances or renewals that mature after February 2021 are prohibited. The FHLBI has indicated it will honor the contractual maturity dates of existing advances to IAS Services LLC that were made prior to February 19, 2016 and extend beyond February 2021. We do not expect there to be any impact to our existing FHLBI borrowings under the FHFA rule. The ability to borrow from the FHLBI is subject to our continued creditworthiness, pledging of sufficient eligible collateral to secure advances, and compliance with certain agreements with FHLBI and FHFA rules.

As discussed in Note 6 - "Other Assets," IAS Services LLC is required to purchase and hold a certain amount of FHLBI stock, which is based, in part, upon the outstanding principal balance of secured loans from the FHLBI.

Exchangeable Senior Notes

In 2013, our wholly-owned subsidiary, IAS Operating Partnership LP, issued $400.0 million in aggregate principal amount of Exchangeable Senior Notes (the "Notes") due March 15, 2018. We retired a portion of the Notes prior to their maturity and fully retired the Notes upon their maturity on March 15, 2018.

The Notes were reported on our condensed consolidated balance sheets net of unamortized debt issuance costs. Debt issuance costs were amortized as an adjustment to interest expense using the effective interest method over the stated legal maturity of the Notes.

The following table summarizes retirements of the Notes during the three months ended March 31, 2018 and 2017.



$ in thousands	Three Months Ended March 31,
	2018		2017
Reacquisition price	143,433		153,750
Less: Par value of Notes retired during the period	(143,410	)	(150,000	)
Add: Write off of unamortized debt issuance cost associated with Notes retired during the period	3		961
Net loss on extinguishment of debt	26		4,711

Accrued interest payable on the Notes was approximately $2.1 million as of December 31, 2017.