Investment securities were comprised of the following as of June 30, 2019 and December 31, 2018 (amounts in thousands):

(1)	Certain fair value option CMBS and RMBS are eliminated in consolidation against VIE liabilities pursuant to ASC 810.

Purchases, sales and principal collections for all investment securities were as follows (amounts in thousands):


	RMBS,		RMBS, fair		CMBS, fair		HTM		Equity		Securitization
	available-for-sale		value option		value option		Securities		Security		VIEs (1)		Total
Three Months Ended June 30, 2019
Purchases	$	—	$	—	$	38,951	$	—	$	—	$	(38,951)	$	—
Sales		—		41,501		25,795		—		—		(66,546)		750
Principal collections		6,417		3,058		12,072		53,462		—		(9,728)		65,281
Three Months Ended June 30, 2018
Purchases	$	—	$	—	$	61,683	$	—	$	—	$	(41,218)	$	20,465
Sales		807		—		—		—		—		—		807
Principal collections		8,036		—		45,599		94,181		—		(45,359)		102,457


	RMBS,		RMBS, fair		CMBS, fair		HTM		Equity		Securitization
	available-for-sale		value option		value option		Securities		Security		VIEs (1)		Total
Six Months Ended June 30, 2019
Purchases	$	—	$	26,272	$	52,213	$	—	$	—	$	(78,485)	$	—
Sales		—		41,501		62,701		—		—		(100,224)		3,978
Principal collections		12,777		5,092		21,909		54,668		—		(21,411)		73,035
Six Months Ended June 30, 2018
Purchases	$	—	$	—	$	91,908	$	—	$	—	$	(71,443)	$	20,465
Sales		807		—		7,948		—		—		(7,948)		807
Principal collections		18,186		—		60,780		302,484		—		(59,763)		321,687

(1)	Represents RMBS and CMBS, fair value option amounts eliminated due to our consolidation of securitization VIEs. These amounts are reflected as repayment of debt of consolidated VIEs in our condensed consolidated statements of cash flows.

RMBS, Available-for-Sale

The Company classified all of its RMBS not eliminated in consolidation as available-for-sale as of June 30, 2019 and December 31, 2018. These RMBS are reported at fair value in the balance sheet with changes in fair value recorded in accumulated other comprehensive income (“AOCI”).

The tables below summarize various attributes of our investments in available-for-sale RMBS as of June 30, 2019 and December 31, 2018 (amounts in thousands):


							Unrealized Gains or (Losses)
							Recognized in AOCI
	Purchase				Recorded				Gross		Gross		Net
	Amortized		Credit		Amortized		Non-Credit		Unrealized		Unrealized		Fair Value
	Cost		OTTI		Cost		OTTI		Gains		Losses		Adjustment		Fair Value
June 30, 2019
RMBS	$	157,721	$	(9,897)	$	147,824	$	(22)	$	53,072	$	—	$	53,050	$	200,874
December 31, 2018
RMBS	$	165,461	$	(9,897)	$	155,564	$	(31)	$	53,546	$	—	$	53,515	$	209,079


	Weighted Average Coupon (1)		Weighted Average Rating	WAL (Years) (2)
June 30, 2019
RMBS	3.6	%	BB-	5.9
December 31, 2018
RMBS	3.7	%	CCC-	6.0

(1)	Calculated using the June 30, 2019 and December 31, 2018 one-month LIBOR rate of 2.398% and 2.503%, respectively, for floating rate securities.

(2)	Represents the remaining WAL of each respective group of securities as of the respective balance sheet date. The WAL of each individual security is calculated using projected amounts and projected timing of future principal payments.

As of June 30, 2019, approximately $170.5 million, or 84.9%, of RMBS were variable rate and paid interest at LIBOR plus a weighted average spread of 1.23%. As of December 31, 2018, approximately $177.4 million, or 84.9%, of RMBS were variable rate and paid interest at LIBOR plus a weighted average spread of 1.22%. We purchased all of the RMBS at a discount, a portion of which will be accreted into income over the expected remaining life of the security. The majority of the income from this strategy is earned from the accretion of this accretable discount.

The following table contains a reconciliation of aggregate principal balance to amortized cost for our RMBS as of June 30, 2019 and December 31, 2018 (amounts in thousands):


	June 30, 2019		December 31, 2018
Principal balance	$	295,215	$	309,497
Accretable yield		(54,821)		(54,779)
Non-accretable difference		(92,570)		(99,154)
Total discount		(147,391)		(153,933)
Amortized cost	$	147,824	$	155,564

The principal balance of credit deteriorated RMBS was $278.1 million and $290.8 million as of June 30, 2019 and December 31, 2018, respectively. Accretable yield related to these securities totaled $50.1 million and $49.5 million as of June 30, 2019 and December 31, 2018, respectively.

The following table discloses the changes to accretable yield and non-accretable difference for our RMBS during the three and six months ended June 30, 2019 (amounts in thousands):


			Non-Accretable
Three Months Ended June 30, 2019	Accretable Yield		Difference
Balance as of April 1, 2019	$	57,391	$	93,131
Accretion of discount		(2,535)		—
Principal write-downs, net		—		(596)
Transfer to/from non-accretable difference		(35)		35
Balance as of June 30, 2019	$	54,821	$	92,570

Six Months Ended June 30, 2019
Balance as of January 1, 2019	$	54,779	$	99,154
Accretion of discount		(5,038)		—
Principal write-downs, net		—		(1,504)
Transfer to/from non-accretable difference		5,080		(5,080)
Balance as of June 30, 2019	$	54,821	$	92,570

We have engaged a third party manager who specializes in RMBS to execute the trading of RMBS, the cost of which was $0.4 million for both the three months ended June 30, 2019 and 2018 and $0.8 million and $0.9 million for the six months ended June 30, 2019 and 2018, respectively, for which has been recorded as management fees in the accompanying condensed consolidated statements of operations.

The following table presents the gross unrealized losses and estimated fair value of any available-for-sale securities that were in an unrealized loss position as of June 30, 2019 and December 31, 2018, and for which other-than-temporary impairments (“OTTI”) (full or partial) have not been recognized in earnings (amounts in thousands):


	Estimated Fair Value				Unrealized Losses
	Securities with a		Securities with a		Securities with a		Securities with a
	loss less than		loss greater than		loss less than		loss greater than
	12 months		12 months		12 months		12 months
As of June 30, 2019
RMBS	$	2,118	$	—	$	(22)	$	—
As of December 31, 2018
RMBS	$	2,148	$	—	$	(31)	$	—

As of both June 30, 2019 and December 31, 2018, there was one security with unrealized losses reflected in the table above. After evaluating the security and recording adjustments for credit-related OTTI, we concluded that the remaining unrealized losses reflected above were noncredit-related and would be recovered from the security’s estimated future cash flows. We considered a number of factors in reaching this conclusion, including that we did not intend to sell the security, it was not considered more likely than not that we would be forced to sell the security prior to recovering our amortized cost, and there were no material credit events that would have caused us to otherwise conclude that we would not recover our cost. Credit losses, which represent most of the OTTI we record on securities, are calculated by comparing (i) the estimated future cash flows of each security discounted at the yield determined as of the initial acquisition date or, if since revised, as of the last date previously revised, to (ii) our amortized cost basis. Significant judgment is used in projecting cash flows for our non-agency RMBS. As a result, actual income and/or impairments could be materially different from what is currently projected and/or reported.

CMBS and RMBS, Fair Value Option

As discussed in the “Fair Value Option” section of Note 2 herein, we elect the fair value option for certain CMBS and RMBS in an effort to eliminate accounting mismatches resulting from the current or potential consolidation of securitization VIEs. As of June 30, 2019, the fair value and unpaid principal balance of CMBS where we have elected the fair value option, excluding the notional value of interest-only securities and before consolidation of securitization VIEs, were $1.2 billion and $2.9 billion, respectively. As of June 30, 2019, the fair value and unpaid principal balance of RMBS where we have elected the fair value option, excluding the notional value of interest-only securities and before consolidation of securitization VIEs, were $63.2 million and $34.9 million, respectively. The $1.2 billion total fair value balance of CMBS and RMBS represents our economic interests in these assets. However, as a result of our consolidation of securitization VIEs, the vast majority of this fair value (all except $44.7 million at June 30, 2019) is eliminated against VIE liabilities before arriving at our GAAP balance for fair value option investment securities.

As of June 30, 2019, $145.0 million of our CMBS were variable rate and none of our RMBS were variable rate.

HTM Debt Securities, Amortized Cost

The table below summarizes unrealized gains and losses of our investments in HTM debt securities as of June 30, 2019 and December 31, 2018 (amounts in thousands):


	Net Carrying Amount		Gross Unrealized		Gross Unrealized
	(Amortized Cost)		Holding Gains		Holding Losses		Fair Value
June 30, 2019
CMBS	$	361,648	$	1,534	$	(649)	$	362,533
Preferred interests		175,183		583		—		175,766
Infrastructure bonds		55,332		717		(575)		55,474
Total	$	592,163	$	2,834	$	(1,224)	$	593,773
December 31, 2018
CMBS	$	408,556	$	2,435	$	(3,349)	$	407,642
Preferred interests		174,825		703		—		175,528
Infrastructure bonds		60,768		178		(168)		60,778
Total	$	644,149	$	3,316	$	(3,517)	$	643,948

The table below summarizes the maturities of our HTM debt securities by type as June 30, 2019 (amounts in thousands):


			Preferred		Infrastructure
	CMBS		Interests		Bonds		Total
Less than one year	$	75,204	$	—	$	—	$	75,204
One to three years		286,444		—		9,094		295,538
Three to five years		—		175,183		—		175,183
Thereafter		—		—		46,238		46,238
Total	$	361,648	$	175,183	$	55,332	$	592,163

As of June 30, 2019 and December 31, 2018, $20.7 million and $21.2 million, respectively, of our infrastructure bonds with an aggregate principal balance of $33.7 million and $34.2 million, respectively, were originally acquired with deteriorated credit quality and had no accretable yield and an aggregate non-accretable difference of $13.0 million.

Equity Security, Fair Value Option

During 2012, we acquired 9,140,000 ordinary shares from a related-party in Starwood European Real Estate Finance Limited (“SEREF”), a debt fund that is externally managed by an affiliate of our Manager and is listed on the London Stock Exchange. The fair value of the investment remeasured in USD was $11.8 million and $11.9 million as of June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019, our shares represent an approximate 2% interest in SEREF.