6. Borrowings

The following table presents borrowings as of June 30, 2013 and December 31, 2012 (dollars in thousands):

				June 30, 2013				December 31, 2012

	Type	Final Maturity	Contractual Interest Rate(1)	Principal Amount		Carrying Value		Principal Amount		Carrying Value
*Securitization bonds payable*
Securitization 2012-1	Non-recourse	Aug-29	LIBOR plus 1.66%	$	124,659	$	124,610	$	124,659	$	124,491

Subtotal securitization bonds payable					124,659		124,610		124,659		124,491
*Credit facilities*
Loan Facility 1	Partial Recourse(2)	Feb-16(3)	2.95%(4)		32,836		32,836		32,836		32,836
Loan Facility 2	Partial Recourse(5)	Jul-17(6)	3.44%(7)		100,000		100,000		54,950		54,950
Loan Facility 3	Non-recourse	Jul-18(8)	4.90%(9)		35,850		35,850		26,850		26,850
Loan Facility 4	Partial Recourse(10)	Mar-18(11)	5.20%(12)		45,500		45,500		—		—
CMBS Facilities	Recourse	(13)	1.45%		11,685		11,685		11,685		11,685

Subtotal credit facilities					225,871		225,871		126,321		126,321

Grand Total				$	350,530	$	350,481	$	250,980	$	250,812

(1): Represents the weighted average as of June 30, 2013.
(2): Recourse solely with respect to 25.0% of "core" assets and 100% of "flex" assets, which may only represent 25.0% of the total credit facility, as such terms are defined in the governing documents.
(3): The initial maturity date is February 28, 2014, with two, one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.
(4): The contractual interest rate depends upon asset type, subject to adjustment, and ranges from one-month LIBOR plus 2.5% to 3.0%.
(5): Recourse solely with respect to 25.0% of the repurchase price for purchased assets with a lender debt yield equal to or greater than 10% at the time of financing plus 100% of the repurchase price for purchased assets with a lender debt yield less than 10% at the time of financing.
(6): The initial maturity date is July 18, 2014, with three, one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.
(7): The contractual interest rate depends upon asset type and characteristic and ranges from one-month LIBOR plus 2.0% to 4.0%.
(8): The initial maturity date is July 30, 2015, with three, one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.
(9): The contractual interest rate depends upon asset type and characteristic and ranges from one-month LIBOR plus 3.95% to 5.95%.
(10): Recourse solely with respect to the greater of: (i) 25.0% of the financed amount of stabilized loans plus the financed amount of transitional loans; or (ii) the lesser of $25.0 million or the aggregate financed amount of all loans.
(11): The initial maturity date is March 11, 2014, with four, one-year extensions available at the option of the Company, which may be exercised upon the satisfaction of certain customary conditions set forth in the governing documents.
(12): The contractual interest rate depends upon asset type and characteristics and ranges from one-month LIBOR plus 2.5% to 3.0%.

(13): The maturity dates on the CMBS Facilities are dependent upon asset type and will typically range from two to three months.

The following table presents scheduled principal on borrowings, based on final maturity as of June 30, 2013 (dollars in thousands):

	Total		Securitization Bonds Payable		Credit Facilities

July 1 - December 31, 2013	$	11,685	$	—	$	11,685
Years Ending December 31:
2014		—		—		—
2015		—		—		—
2016		32,836		—		32,836
2017		100,000		—		100,000
Thereafter		206,009		124,659		81,350

Total	$	350,530	$	124,659	$	225,871

Securitization Financing Transaction

Securitization 2012-1

In November 2012, the Company entered into a $351.4 million securitization financing transaction ("Securitization 2012-1") collateralized by CRE debt investments originated by the Company and the Sponsor. The Company contributed nine CRE debt investments with a $199.2 million aggregate principal amount and retained an equity interest of $70.0 million. A total of $227.5 million of permanent, non-recourse, non-mark-to-market bonds were issued, of which $129.5 million financed the CRE debt investments contributed by the Company, representing an advance rate of 65.0% and a weighted average coupon of LIBOR plus 1.63%. The Company used the proceeds to repay $117.7 million of borrowings on its loan facilities.

The retained equity interests of the Company and the Sponsor are held by a general partnership and both the Company and the Sponsor are the general partners ("Financing JV"). Both Securitization 2012-1 and the Financing JV are considered voting interest entities. The Sponsor was appointed special servicer of Securitization 2012-1 and is the designated member of the Financing JV. The entities are not consolidated due to the substantive kick-out rights of the Company. The transferred debt investments failed sale treatment under U.S. GAAP as the Company maintains effective control of its contributed assets. The Company records its respective CRE debt investments and securitization bonds payable on its consolidated balance sheets.

Term Loan Facilities

In February 2012, a subsidiary of the Company entered into a master repurchase and securities contract ("Loan Facility 1") of $100.0 million to finance the origination of CRE first mortgage loans. In connection with Loan Facility 1, the Company, together with the Operating Partnership, entered into a guaranty agreement, under which the Company and the Operating Partnership guarantee certain of the obligations under Loan Facility 1. Additionally, in connection with Loan Facility 1, the Operating Partnership provided a pledge and security agreement over its interests in the borrowing subsidiary of the Company. Loan Facility 1 and related agreements contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. The Company has agreed to guarantee certain customary obligations under Loan Facility 1 if the Company or an affiliate of the Company engage in certain customary bad acts. Loan Facility 1 contains a liquidity covenant that requires the borrowing subsidiary of the Company to maintain at least $5.0 million and a maximum of $15.0 million in unrestricted cash or cash equivalents at all times during the term of Loan Facility 1.

In July 2012, a subsidiary of the Company entered into a master repurchase agreement ("Loan Facility 2") of $50.0 million to finance first mortgage loans and senior loan participations secured by commercial real estate. Loan Facility 2 was increased to $100.0 million in November 2012 and to $150.0 million in April 2013. In connection with Loan Facility 2, the Company agreed to guarantee certain obligations under Loan Facility 2 if the Company or an affiliate of the Company engage in certain customary bad acts. Loan Facility 2 and related agreements contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. More specifically, the borrowing subsidiary of the Company must maintain at least $3.8 million and a maximum of $22.5 million in unrestricted cash at all times during the term of Loan Facility 2.

In July 2012, a subsidiary of the Company entered into a credit and security agreement ("Loan Facility 3") of $40.0 million on a non-recourse basis, subject to certain exceptions, to finance first mortgage loans and senior loan participations secured by commercial real estate. In connection with Loan Facility 3, the Operating Partnership agreed to guarantee interest payments and the customary obligations under Loan Facility 3 if either the Company or its affiliates engage in certain customary bad acts. In addition, the Operating Partnership pledged its interests in the Company's borrowing subsidiary as collateral. Loan Facility 3 and related agreements contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. More specifically, the Operating Partnership must maintain at least $3.8 million and as much as $7.5 million in unrestricted cash or other eligible investments, at all times during the term of Loan Facility 3.

In March 2013, a subsidiary of the Company entered into a master repurchase agreement ("Loan Facility 4") of $200.0 million to finance first mortgage loans and senior interests secured by commercial real estate. In connection with Loan Facility 4, the Company and the Operating Partnership entered into a guaranty agreement, under which the Company and the Operating Partnership guaranty certain of the obligations under Loan Facility 4. Loan Facility 4 and related agreements contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. More specifically, the Company must maintain at least $20.0 million in unrestricted cash or cash equivalents at all times during the term of Loan Facility 4. In addition, the Company has agreed to guarantee certain customary obligations under Loan Facility 4 if the Company or an affiliate of the Company engage in certain customary bad acts.

As of June 30, 2013, the Company had $360.3 million principal amount of CRE debt investments, financed with $214.2 million under four term loan facilities ("Term Loan Facilities").

During the initial term, all of the Term Loan Facilities act as revolving credit facilities that can be paid down as assets payoff and re-drawn upon for new investments. As of June 30, 2013, the Company was in compliance with all of its financial covenants.

CMBS Facilities

In September 2012, the Company entered into two master repurchase agreements ("CMBS Facilities") to finance CMBS investments. The CMBS Facilities contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of this type. As of June 30, 2013, the Company had $16.6 million principal amount of CRE securities, financed with $11.7 million under its CMBS Facilities.