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Secured Borrowings
 12 Months Ended
Dec. 31, 2021
Secured Debt [Abstract]  
Secured Borrowings Secured Borrowings
Secured Financing Agreements
The following table is a summary of our secured financing agreements in place as of December 31, 2021 and 2020 (dollars in thousands):
Outstanding Balance at
Current
Maturity		   Extended
Maturity (a)		   Weighted Average
Pricing		Pledged Asset
Carrying Value		Maximum
Facility Size		   December 31, 2021December 31, 2020
Repurchase Agreements:
Commercial LoansAug 2022 to Jul 2026(b)Jun 2025 to Dec 2030(b)
Index + 2.00%
(c)$9,141,387 $10,485,460 (d)$6,556,438 $4,878,939 
Residential LoansJul 2022 to Dec 2023N/A
Index + 2.02%
2,244,663 2,850,000 1,744,225 22,590 
Infrastructure LoansSep 2024Sep 2026
LIBOR + 2.00%
455,391 650,000 379,095 232,961 
Conduit LoansFeb 2022 to Jun 2024Feb 2023 to Jun 2025
LIBOR + 1.99%
226,634 350,000 174,130 53,554 
CMBS/RMBSSep 2022 to May 2031(e)Dec 2022 to Nov 2031(e)(f)1,166,352 819,979 688,146 (g)620,763 
Total Repurchase Agreements13,234,427 15,155,439 9,542,034 5,808,807 
Other Secured Financing:
Borrowing Base FacilityNov 2024Oct 2026
SOFR + 2.11%
600,525 750,000 (h)213,478 43,014 
Commercial Financing FacilitiesDec 2023 to Jan 2024Jan 2026 to Dec 2030
Index + 1.81%
208,022 243,476 167,476 81,218 
Residential Financing FacilitySep 2022Sep 20253.00%396,201 250,000 102,018 215,024 
Infrastructure Acquisition FacilityN/AN/AN/A— — — 467,450 
Infrastructure Financing FacilitiesJul 2022 to Oct 2022Oct 2024 to Jul 2027
Index + 2.01%
1,042,292 1,250,000 855,646 538,645 
Property Mortgages - Fixed rateNov 2024 to Sep 2029(i)N/A4.35%389,586 272,522 272,522 1,077,528 
Property Mortgages - Variable rateNov 2022 to Dec 2025N/A(j)699,124 734,350 712,493 960,903 
Term Loan and Revolver(k)N/A(k) N/A (k)938,753 788,753 645,000 
Federal Home Loan BankN/AN/AN/A— — — 396,000 
Total Other Secured Financing3,335,750 4,439,101 3,112,386 4,424,782 
$16,570,177 $19,594,540 12,654,420 10,233,589 
Unamortized net discount(13,350)(13,569)
Unamortized deferred financing costs(64,220)(73,830)
$12,576,850 $10,146,190 
______________________________________________________________________________________________________________________
(a)Subject to certain conditions as defined in the respective facility agreement.
(b)For certain facilities, borrowings collateralized by loans existing at maturity may remain outstanding until such loan collateral matures, subject to certain specified conditions.
(c)Certain facilities with an outstanding balance of $2.1 billion as of December 31, 2021 are indexed to GBP LIBOR, EURIBOR, BBSY and SONIA. The remainder are indexed to USD LIBOR or SOFR.
(d)Certain facilities with an aggregate initial maximum facility size of $9.4 billion may be increased to $10.5 billion, subject to certain conditions. The $10.5 billion amount includes such upsizes.
(e)Certain facilities with an outstanding balance of $276.9 million as of December 31, 2021 carry a rolling 11-month or 12-month term which may reset monthly or quarterly with the lender's consent. These facilities carry no maximum facility size.
(f)A facility with an outstanding balance of $240.8 million as of December 31, 2021 has a weighted average fixed annual interest rate of 3.20%. All other facilities are variable rate with a weighted average rate of LIBOR + 1.71%.
(g)Includes: (i) $240.8 million outstanding on a repurchase facility that is not subject to margin calls; and (ii) $35.8 million outstanding on one of our repurchase facilities that represents the 49% pro rata share owed by a non-controlling partner in a consolidated joint venture (see Note 16).
(h)The maximum facility size as of December 31, 2021 of $650.0 million is scheduled to decline to $450.0 million as of March 31, 2022 and may be increased to $750.0 million, subject to certain conditions.
(i)The weighted average maturity is 5.5 years as of December 31, 2021.
(j)Includes a $600.0 million first mortgage and mezzanine loan secured by our Medical Office Portfolio. This debt has a weighted average interest rate of LIBOR + 2.07% that we swapped to a fixed rate of 3.34%. The remainder have a weighted average rate of LIBOR + 2.39%.
(k)Consists of: (i) a $788.8 million term loan facility that matures in July 2026, of which $391.0 million has an annual interest rate of LIBOR + 2.50% and $397.8 million (the “Incremental Borrowings”) has an annual interest rate of LIBOR + 3.25%, subject to a 0.75% LIBOR floor, and (ii) a $150.0 million revolving credit facility that matures in April 2026 with an annual interest rate of SOFR + 2.50%. These facilities are secured by the equity interests in certain of our subsidiaries which totaled $5.5 billion as of December 31, 2021.

As of December 31, 2021, the above table no longer reflects property mortgages of the Woodstar Portfolios, which as discussed in Notes 2 and 8, are now reflected within “Investments of consolidated affordable housing fund” on our consolidated balance sheet.

In the normal course of business, the Company is in discussions with its lenders to extend, amend or replace any financing facilities which contain near term expirations.

During the year ended December 31, 2021, we entered into mortgage loans to upsize and reprice a portion of our Woodstar I and Woodstar II Portfolio debt. We borrowed a total of $462.9 million, of which $222.0 million was used to repay a portion of our existing mortgage loans. The mortgage loan related to Woodstar I for $380.0 million carries a two-year term, with three one-year extension options, and has an annual interest rate of LIBOR + 2.11%. In connection with this upsize, we acquired an interest rate cap with a strike of 1.00%. The mortgage loans related to Woodstar II for $82.9 million carry seven-year terms and a weighted average fixed annual interest rate of 4.36%.

In September 2021, we amended the Term Loan facility to increase the Incremental Borrowings by $150.0 million and reduce the annual interest rate by 0.25% to LIBOR + 3.25% on all the Incremental Borrowings, subject to a 0.75% LIBOR floor. Additionally, we increased the maximum facility size of the revolver by $30.0 million to $150.0 million, reduced the annual rate by 0.50% to SOFR + 2.50% and extended the maturity from July 2024 to April 2026.

Our secured financing agreements contain certain financial tests and covenants. As of December 31, 2021, we were in compliance with all such covenants.

We seek to mitigate risks associated with our repurchase agreements by managing risk related to the credit quality of our assets, interest rates, liquidity, prepayment speeds and market value. The margin call provisions under the majority of our repurchase facilities, consisting of 66% of these agreements, do not permit valuation adjustments based on capital market events and are limited to collateral-specific credit marks generally determined on a commercially reasonable basis. To monitor credit risk associated with the performance and value of our loans and investments, our asset management team regularly reviews our investment portfolios and is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary. For the 34% of repurchase agreements which do permit valuation adjustments based on capital market events, approximately 7% of these pertain to our loans held-for-sale, for which we manage credit risk through the purchase of credit index instruments. We further seek to manage risks associated with our repurchase agreements by matching the maturities and interest rate characteristics of our loans with the related repurchase agreement.

For the years ended December 31, 2021, 2020 and 2019, approximately $35.6 million, $36.4 million and $34.3 million, respectively, of amortization of deferred financing costs from secured financing agreements was included in interest expense on our consolidated statements of operations.

As of December 31, 2021, JPMorgan Chase Bank, N.A. and Morgan Stanley Bank, N.A. held collateral sold under certain of our repurchase agreements with carrying values that exceeded the respective repurchase obligations by $667.2 million and $660.4 million, respectively. The weighted average extended maturities of those repurchase agreements were 3.7 and 3.8 years, respectively.
Collateralized Loan Obligations and Single Asset Securitization

Commercial and Residential Lending Segment

In July 2021, we contributed into a single asset securitization, STWD 2021-HTS, a previously originated $230.0 million first mortgage and mezzanine loan on a portfolio of 41 extended stay hotels with $210.1 million of third party financing.

In May 2021, we refinanced a pool of our commercial loans held-for-investment through a CLO, STWD 2021-FL2. On the closing date, the CLO issued $1.3 billion of notes and preferred shares, of which $1.1 billion of notes was purchased by third party investors. We retained $70.1 million of notes, along with preferred shares with a liquidation preference of $127.5 million. The CLO contains a reinvestment feature that, subject to certain eligibility criteria, allows us to contribute new loans or participation interests in loans to the CLO in exchange for cash. During the year ended December 31, 2021, we utilized the reinvestment feature, contributing $58.6 million of additional interests into the CLO.

In August 2019, we refinanced a pool of our commercial loans held-for-investment through a CLO, STWD 2019-FL1. On the closing date, the CLO issued $1.1 billion of notes and preferred shares, of which $936.4 million of notes was purchased by third party investors. We retained $86.6 million of notes, along with preferred shares with a liquidation preference of $77.0 million. The CLO contains a reinvestment feature that, subject to certain eligibility criteria, allows us to contribute new loans or participation interests in loans to the CLO in exchange for cash. During the years ended December 31, 2021, 2020 and 2019 we utilized the reinvestment feature, contributing $261.9 million, $134.7 million and $88.1 million, respectively, of additional interests into the CLO.

Infrastructure Lending Segment

In April 2021, we refinanced a pool of our infrastructure loans held-for-investment through a CLO, STWD 2021-SIF1. On the closing date, the CLO issued $500.0 million of notes and preferred shares, of which $410.0 million of notes was purchased by third party investors. We retained preferred shares with a liquidation preference of $90.0 million. The CLO contains a reinvestment feature that, subject to certain eligibility criteria, allows us to contribute new loans or participation interests in loans to the CLO in exchange for cash. During the year ended December 31, 2021, we utilized the reinvestment feature, contributing $45.9 million of additional interests into the CLO.

The following table is a summary of our CLOs and our SASB as of December 31, 2021 and 2020 (amounts in thousands):
December 31, 2021CountFace
Amount		Carrying
Value		Weighted
Average Spread		Maturity
STWD 2019-FL1
Collateral assets24 $1,092,887 $1,103,513 
LIBOR + 4.19%
(a)November 2024(b)
Financing1 936,375 933,049 
SOFR + 1.63%
(c)July 2038(d)
STWD 2021-FL2
Collateral assets25 1,272,133 1,279,678 
LIBOR + 4.22%
(a)February 2025(b)
Financing1 1,077,375 1,069,691 
LIBOR + 1.78%
(c)April 2038(d)
STWD 2021-SIF1
Collateral assets31 491,299 506,666 
LIBOR + 3.91%
(a)March 2026(b)
Financing1 410,000 405,319 
LIBOR  + 2.15%
(c)April 2032(d)
STWD 2021-HTS
Collateral assets1 230,000 230,587 
LIBOR + 4.12%
(a)April 2026(b)
Financing1 210,091 208,057 
LIBOR + 2.48%
(c)April 2034(d)
Total
Collateral assets$3,086,319 $3,120,444 
Financing$2,633,841 $2,616,116 
December 31, 2020
STWD 2019-FL1
Collateral assets23 $1,002,445 $1,099,439 
LIBOR + 3.93%
(a)April 2024(b)
Financing1 936,375 930,554 
LIBOR + 1.64%
(c)July 2038(d)
___________________________________________________________________________________________________________________________________
(a)Represents the weighted-average coupon earned on variable rate loans during the respective year-to-date period. Of the loans financed by the STWD 2021-FL2 CLO as of December 31, 2021, 7% earned fixed-rate weighted average interest
of 7.49%. Of the loans financed by the STWD 2021-SIF1 CLO as of December 31, 2021, 2% earned fixed-rate weighted average interest of 5.62%.
(b)Represents the weighted-average maturity, assuming the extended contractual maturity of the collateral assets.
(c)Represents the weighted-average cost of financing incurred during the respective year-to-date period, inclusive of deferred issuance costs.
(d)Repayments of the CLOs and SASB are tied to timing of the related collateral asset repayments. The term of the CLOs and SASB financing obligations represents the legal final maturity date.
We incurred $26.9 million of issuance costs in connection with the CLOs and SASB, which are amortized on an effective yield basis over the estimated life of the CLOs and SASB. For the years ended December 31, 2021, 2020 and 2019, approximately $5.7 million, $2.5 million and $0.9 million, respectively, of amortization of deferred financing costs was included in interest expense on our consolidated statements of operations. As of December 31, 2021 and 2020, our unamortized issuance costs were $17.7 million and $5.8 million, respectively.
The CLOs and SASB are considered VIEs, for which we are deemed the primary beneficiary. We therefore consolidate the CLOs and SASB. Refer to Note 16 for further discussion.
Maturities
Our credit facilities generally require principal to be paid down prior to the facilities’ respective maturities if and when we receive principal payments on, or sell, the investment collateral that we have pledged. The following table sets forth our principal repayments schedule for secured financings based on the earlier of (i) the extended contractual maturity of each credit facility or (ii) the extended contractual maturity of each of the investments that have been pledged as collateral under the respective credit facility (amounts in thousands):
Repurchase
Agreements		Other Secured
Financing		CLOs and SASB (a)Total
2022$2,068,288 $60,194 $123,448 $2,251,930 
20231,090,287 826,666 643,689 2,560,642 
20241,089,101 319,918 445,272 1,854,291 
20253,263,185 256,299 497,976 4,017,460 
20261,777,704 1,207,092 923,456 3,908,252 
Thereafter253,469 442,217 — 695,686 
Total$9,542,034 $3,112,386 $2,633,841 $15,288,261 
______________________________________________________________________________________________________________________
(a)For the CLOs, the above does not assume utilization of their reinvestment features. The SASB does not have a reinvestment feature.
Unsecured Senior Notes
The following table is a summary of our unsecured senior notes outstanding as of December 31, 2021 and 2020 (dollars in thousands):
Coupon
Rate		Effective
Rate (1)		Maturity
Date		Remaining
Period of
Amortization		Carrying Value at
December 31, 2021December 31, 2020
2021 Senior NotesN/AN/AN/AN/A$— $700,000 
2023 Senior Notes5.50 %5.71 %11/1/20231.8 years300,000 300,000 
2023 Convertible Notes4.38 %4.57 %4/1/20231.2 years250,000 250,000 
2024 Senior Notes3.75 %3.94 %12/31/20243.0 years400,000 — 
2025 Senior Notes4.75 %(2)5.04 %3/15/20253.2 years500,000 500,000 
2026 Senior Notes3.63 %3.77 %7/15/20264.5 years400,000 — 
Total principal amount1,850,000 1,750,000 
Unamortized discount—Convertible Notes(578)(2,559)
Unamortized discount—Senior Notes(10,067)(9,332)
Unamortized deferred financing costs(10,765)(5,589)
Carrying amount of debt components$1,828,590 $1,732,520 
Carrying amount of conversion option equity components recorded in additional paid-in capital for outstanding convertible notesN/A$3,755 
______________________________________________________________________________________________________________________
(1)Effective rate includes the effects of underwriter purchase discount.
(2)The coupon on the 2025 Senior Notes is 4.75%.  At closing, we swapped $470.0 million of the notes to a floating rate of LIBOR + 2.53%.
Senior Notes Due December 2021

    On December 16, 2016, we issued $700.0 million of 5.00% Senior Notes due 2021 (the “2021 Senior Notes”). On September 15, 2021, we redeemed $400.0 million of our 2021 Senior Notes and the remaining $300.0 million was repaid upon maturity on December 15, 2021.
Senior Notes Due November 2023

    On November 2, 2020, we issued $300.0 million of 5.50% Senior Notes due 2023 (the “2023 Senior Notes”). The 2023 Senior Notes mature on November 1, 2023. Prior to August 1, 2023, we may redeem some or all of the 2023 Senior Notes at a price equal to 100% of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable date of redemption. On and after August 1, 2023, we may redeem some or all of the 2023 Senior Notes at a price equal to 100% of the principal amount thereof. In addition, prior to November 1, 2022, we may redeem up to 40% of the 2023 Senior Notes at the applicable redemption price using the proceeds of certain equity offerings.
Senior Notes Due 2024
On December 15, 2021, we issued $400.0 million of 3.75% Senior Notes due 2024 (the "2024 Senior Notes"). The 2024 Senior Notes mature on December 31, 2024. Prior to September 30, 2024, we may redeem some or all of the 2024 Senior Notes at a price equal to 100% of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable date of redemption. On and after September 30, 2024, we may redeem some or all of the 2024 Senior Notes at a price equal to 100% of the principal amount thereof. In addition, prior to September 30, 2024, we may redeem up to 40% of the 2024 Senior Notes at the applicable redemption price using the proceeds of certain equity offerings.

Senior Notes Due 2025

    On December 4, 2017, we issued $500.0 million of 4.75% Senior Notes due 2025 (the “2025 Senior Notes”). The 2025 Notes mature on March 15, 2025. Prior to September 15, 2024, we may redeem some or all of the 2025 Senior Notes at a price equal to 100% of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable date of redemption. On and after September 15, 2024, we may redeem some or all of the 2025 Senior Notes at a price equal to 100% of the principal amount thereof. In addition, prior to March 15, 2021, we may redeem up to 40% of the 2025 Senior Notes at the
applicable redemption price using the proceeds of certain equity offerings. The 2025 Senior Notes were swapped to floating rate (see Note 14).
Senior Notes Due 2026
On July 14, 2021, we issued $400.0 million of 3.625% Senior Notes due 2026 (the “2026 Senior Notes”). The 2026 Senior Notes mature on July 15, 2026. Prior to January 15, 2026, we may redeem some or all of the 2026 Senior Notes at a price equal to 100% of the principal amount thereof, plus the applicable “make-whole” premium as of the applicable date of redemption. On and after January 15, 2026, we may redeem some or all of the 2026 Senior Notes at a price equal to 100% of the principal amount thereof. In addition, prior to July 15, 2023, we may redeem up to 40% of the 2026 Senior Notes at the applicable redemption price using the proceeds of certain equity offerings.
Our unsecured senior notes contain certain financial tests and covenants. As of December 31, 2021, we were in compliance with all such covenants.
Convertible Senior Notes
On March 29, 2017, we issued $250.0 million of 4.375% Convertible Senior Notes due 2023 (the “2023 Convertible Notes”) which remain outstanding at December 31, 2021 and mature on April 1, 2023.
During the year ended December 31, 2019, we settled the remaining $78.0 million principal amount of our 4.00% Convertible Senior Notes due 2019 through the issuance of 3.6 million shares of common stock and cash payments of $12.0 million.
We recognized interest expense of $11.6 million, $12.2 million and $12.3 million during the years ended December 31, 2021, 2020 and 2019, respectively, from our Convertible Notes.
The following table details the conversion attributes of our Convertible Notes outstanding as of December 31, 2021 (amounts in thousands, except rates):
December 31, 2021
ConversionConversion
Rate (1)Price (2)
2023 Convertible Notes38.5959$25.91
______________________________________________________________________________________________________________________
(1)The conversion rate represents the number of shares of common stock issuable per $1,000 principal amount of 2023 Convertible Notes converted, as adjusted in accordance with the indenture governing the 2023 Convertible Notes (including the applicable supplemental indenture).
(2)As of December 31, 2021, 2020, and 2019, the market price of the Company’s common stock was $24.30, $19.30 and $24.86, respectively.
The if-converted value of the 2023 Convertible Notes was less than their principal amount by $15.5 million at December 31, 2021 as the closing market price of the Company’s common stock of $24.30 was less than the implicit conversion price of $25.91 per share. The if-converted value of the principal amount of the 2023 Convertible Notes was $234.5 million as of December 31, 2021. As of December 31, 2021, the net carrying amount and fair value of the 2023 Convertible Notes was $249.1 million and $254.4 million, respectively.
Upon conversion of the 2023 Convertible Notes, settlement may be made in common stock, cash or a combination of both, at the option of the Company.
Conditions for Conversion
Prior to October 1, 2022, the 2023 Convertible Notes will be convertible only upon satisfaction of one or more of the following conditions: (1) the closing market price of the Company’s common stock is at least 110% of the conversion price of the 2023 Convertible Notes for at least 20 out of 30 trading days prior to the end of the preceding fiscal quarter, (2) the trading price of the 2023 Convertible Notes is less than 98% of the product of (i) the conversion rate and (ii) the closing price of the Company’s common stock during any five consecutive trading day period, (3) the Company issues certain equity instruments at less than the 10-day average closing market price of its common stock or the per-share value of certain distributions exceeds the
market price of the Company’s common stock by more than 10% or (4) certain other specified corporate events (significant consolidation, sale, merger, share exchange, fundamental change, etc.) occur.
On or after October 1, 2022, holders of the 2023 Convertible Notes may convert each of their notes at the applicable conversion rate at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.