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Debt
 3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Debt Debt
Repurchase Agreements

The Company has entered into two repurchase facilities whereby the Company, through two wholly-owned Delaware trusts (the “Trusts”) acquires pools of mortgage loans which are then sold by the Trusts, as “Seller” to two separate counterparties, the “buyer” or “buyers.” One facility has a ceiling of $250.0 million and the other $400.0 million at any one time. Upon the time of the initial sale to the buyer, the Trust, with a simultaneous agreement, also agrees to repurchase the pools of mortgage loans from the buyer. Mortgage loans sold under these facilities carry interest calculated based on a spread to one-month LIBOR, which are fixed for the term of the borrowing. The purchase price that the Trust realizes upon the initial sale of the mortgage loans to the buyer can vary between 70% and 85% of the asset’s acquisition price, depending upon the facility being utilized and/or the quality of the underlying collateral. The obligations of a Trust to repurchase these mortgage loans at a future date are guaranteed by the Operating Partnership. The difference between the market value of the asset and the amount of the repurchase agreement is generally the amount of equity in the position and is intended to provide the buyer with some protection against fluctuations in the value of the collateral, and/or a failure by the Company to repurchase the asset and repay the borrowing at maturity. The Company has also entered into three repurchase facilities substantially similar to the mortgage loan repurchase facilities, but where the pledged assets are the class B bonds and certificates from the Company's secured borrowing transactions. These facilities have no effective ceilings. Each repurchase transaction represents its own borrowing. As such, the ceilings associated with these transactions are the amounts currently borrowed at any one time. The Company has effective control over the assets subject to all of these transactions; therefore, the Company’s repurchase transactions are accounted for as financing arrangements.

The Servicer services these mortgage loans pursuant to the terms of a Servicing Agreement by and among the Servicer and each Buyer. Each Servicing Agreement has the same fees and expenses terms as the Company’s Servicing Agreement described under Note 10 — Related party transactions. The Operating Partnership, as guarantor, will provide to the buyers a limited guaranty of certain losses incurred by the buyers in connection with certain events and/or the Seller’s obligations under the mortgage loan purchase agreement, following the breach of certain covenants by the Seller, the occurrence of certain bad acts by the Seller, the occurrence of certain insolvency events of the Seller or other events specified in the Guaranty. As security for its obligations under the Guaranty, the guarantor will pledge the Trust Certificate representing the Guarantor’s 100% beneficial interest in the Seller.

The following table sets forth the details of the Company’s repurchase transactions and facilities ($ in thousands):
​​March 31, 2020
Maturity DateOrigination dateMaximum
Borrowing
Capacity		Amount
Outstanding		Amount of
Collateral		Percentage of Collateral CoverageInterest Rate
April 2, 2020January 3, 2020$1,758  $1,758  $2,388  136 %2.96 %
April 2, 2020January 3, 20201,684  1,684  2,287  136 %2.96 %
April 13, 2020March 12, 202037,201  37,201  49,877  134 %2.46 %
April 13, 2020March 12, 20203,236  3,236  4,655  144 %2.56 %
April 22, 2020March 24, 202035,381  35,381  51,679  146 %5.00 %
April 27, 2020January 28, 20205,749  5,749  7,464  130 %3.00 %
April 27, 2020March 27, 20204,811  4,811  10,024  208 %3.71 %
April 27, 2020March 27, 20204,108  4,108  7,101  173 %3.71 %
April 27, 2020January 28, 20202,522  2,522  3,381  134 %2.80 %
April 27, 2020March 27, 20202,153  2,153  10,938  508 %3.86 %
June 3, 2020March 3, 202020,987  20,987  27,814  133 %3.11 %
June 3, 2020March 3, 202011,181  11,181  14,682  131 %3.11 %
June 3, 2020March 3, 202010,019  10,019  13,192  132 %3.11 %
June 3, 2020December 6, 20196,097  6,097  7,565  124 %3.64 %
June 3, 2020March 3, 20205,161  5,161  6,616  128 %3.11 %
June 3, 2020December 6, 20194,704  4,704  5,755  122 %3.64 %
June 3, 2020March 3, 20203,827  3,827  4,907  128 %3.11 %
June 3, 2020December 6, 20193,053  3,053  3,959  130 %3.64 %
June 3, 2020December 6, 20192,332  2,332  3,360  144 %3.79 %
June 3, 2020March 3, 20201,848  1,848  2,640  143 %3.21 %
June 3, 2020December 6, 20191,132  1,132  1,607  142 %3.79 %
June 19, 2020March 20, 202014,599  14,599  19,893  136 %6.22 %
June 19, 2020December 19, 201913,447  13,447  17,077  127 %3.55 %
June 19, 2020March 20, 20209,571  9,571  13,043  136 %6.22 %
June 19, 2020March 20, 20204,691  4,691  6,089  130 %6.22 %
June 19, 2020March 20, 20202,665  2,665  4,050  152 %6.72 %
June 19, 2020December 19, 20191,155  1,155  1,687  146 %3.70 %
June 26, 2020March 26, 202020,906  20,906  31,930  153 %9.23 %
June 30, 2020January 3, 20208,328  8,328  3,656  44 %3.56 %
June 30, 2020January 3, 20206,099  6,099  9,038  148 %3.56 %
June 30, 2020December 30, 20195,286  5,286  6,850  130 %3.57 %
June 30, 2020January 3, 20205,116  5,116  6,721  131 %3.56 %
June 30, 2020December 30, 20193,324  3,324  4,667  140 %3.72 %
July 10, 2020January 13, 20209,020  9,020  13,016  144 %3.67 %
July 31, 2020February 3, 20207,763  7,763  9,702  125 %3.56 %
July 31, 2020February 3, 20207,151  7,151  9,537  133 %3.56 %
July 10, 2020July 15, 2016250,000  30,141  44,217  147 %3.38 %
September 24, 2020September 25, 2019400,000  112,885  164,103  145 %3.11 %
Totals​$938,065  $431,091  $607,167  141 %3.86 %
​​December 31, 2019
Maturity DateOrigination dateMaximum
Borrowing
Capacity		Amount
Outstanding		Amount of
Collateral		Percentage of Collateral CoverageInterest Rate
January 3, 2020November 26, 2019$8,411  $8,411  $11,098  132 %3.45 %
January 3, 2020November 26, 20196,093  6,093  9,038  148 %3.45 %
January 3, 2020November 26, 20195,175  5,175  6,855  132 %3.45 %
January 3, 2020December 2, 201911,966  11,966  15,742  132 %3.45 %
January 3, 2020December 2, 201910,648  10,648  14,058  132 %3.45 %
January 3, 2020December 2, 20195,485  5,485  7,050  129 %3.45 %
January 3, 2020December 2, 20194,096  4,096  5,261  128 %3.45 %
January 3, 2020December 2, 20191,644  1,644  2,388  145 %3.55 %
January 3, 2020December 2, 20191,576  1,576  2,287  145 %3.55 %
January 10, 2020December 11, 201921,088  21,088  28,284  134 %3.47 %
January 10, 2020December 11, 20191,808  1,808  2,640  146 %3.57 %
January 13, 2020July 11, 20198,956  8,956  13,016  145 %4.16 %
January 21, 2020December 20, 201915,718  15,718  20,623  131 %3.41 %
January 21, 2020December 20, 201910,305  10,305  13,521  131 %3.41 %
January 21, 2020December 20, 20195,840  5,840  7,324  125 %3.41 %
January 21, 2020December 20, 20192,784  2,784  4,050  145 %3.51 %
January 28, 2020October 30, 20195,318  5,318  7,464  140 %3.19 %
January 28, 2020October 30, 20192,520  2,520  3,381  134 %2.99 %
February 3, 2020August 1, 20197,568  7,568  9,702  128 %4.19 %
February 3, 2020August 1, 20196,664  6,664  9,537  143 %4.19 %
February 24, 2020November 26, 201941,412  41,412  54,828  132 %2.92 %
March 25, 2020September 25, 20197,075  7,075  10,024  142 %3.96 %
March 25, 2020September 25, 20195,851  5,851  7,423  127 %3.81 %
March 26, 2020September 26, 201927,075  27,075  34,591  128 %3.81 %
March 27, 2020September 27, 20192,915  2,915  3,709  127 %3.79 %
June 3, 2020December 6, 20196,097  6,097  7,891  129 %3.64 %
June 3, 2020December 6, 20194,704  4,704  6,106  130 %3.64 %
June 3, 2020December 6, 20193,053  3,053  4,035  132 %3.64 %
June 3, 2020December 6, 20192,332  2,332  3,360  144 %3.79 %
June 3, 2020December 6, 20191,132  1,132  1,607  142 %3.79 %
June 19, 2020December 19, 201913,447  13,447  18,076  134 %3.55 %
June 19, 2020December 19, 20191,155  1,155  1,687  146 %3.70 %
June 30, 2020December 30, 20195,286  5,286  7,044  133 %3.57 %
June 30, 2020December 30, 20193,324  3,324  4,667  140 %3.72 %
July 10, 2020July 15, 2016250,000  28,931  57,397  198 %4.28 %
September 24, 2020September 25, 2019400,000  116,662  164,403  141 %4.24 %
Totals​$918,521  $414,114  $580,167  140 %3.77 %

The guaranty establishes a master netting arrangement; however, the arrangement does not meet the criteria for offsetting within the Company’s consolidated balance sheets. A master netting arrangement derives from contractual agreements entered into by two parties to multiple contracts that provides for the net settlement of all contracts covered by the agreements in the event of default under any one contract. During the last two weeks in March 2020, the Company received margin calls from its financing counterparties in the amount of $28.2 million due to the turmoil in the financial markets resulting from the COVID-19 outbreak. As of March 31, 2020, the Company had $32.4 million of cash collateral on deposit with financing counterparties. This cash is included in Prepaid expenses and other assets on its consolidated balance sheet at
March 31, 2020 and is not netted against its Borrowings under repurchase agreements. The amount outstanding on the Company’s repurchase facilities and the carrying value of the Company’s loans pledged as collateral are presented as gross amounts in the Company’s consolidated balance sheets at March 31, 2020 and December 31, 2019 in the table below ($ in thousands):

Gross amounts not offset in balance sheet
March 31, 2020December 31, 2019
Gross amount of recognized liabilities $431,091  $414,114  
Gross amount of loans and securities pledged as collateral607,167  580,167  
Other prepaid collateral32,360  4,117  
Net collateral amount$143,716  $161,936  

Secured Borrowings

From inception (January 30, 2014) to March 31, 2020, the Company has completed 15 secured borrowings for its own balance sheet, not including its off-balance sheet joint ventures in which it holds investments in various classes of securities, pursuant to Rule 144A under the Securities Act, six of which were outstanding at March 31, 2020. The secured borrowings are structured as debt financings and not sales through a real estate investment conduit (“REMIC”), and the loans included in the secured borrowings remain on the Company’s consolidated balance sheet as the Company is the primary beneficiary of the securitization trusts, which are VIEs. The securitization VIEs are structured as pass through entities that receive principal and interest on the underlying mortgages and distribute those payments to the holders of the notes. The Company’s exposure to the obligations of the VIEs is generally limited to its investments in the entities. The notes that are issued by the securitization trusts are secured solely by the mortgages held by the applicable trusts and not by any of the Company’s other assets. The mortgage loans of the applicable trusts are the only source of repayment and interest on the notes issued by such trusts. The Company does not guarantee any of the obligations of the trusts under the terms of the agreement governing the notes or otherwise.

The Company’s secured borrowings are generally structured with Class A notes, subordinate notes, and trust certificates, which have rights to the residual interests in the mortgages once the notes are repaid. With the exception of the Company’s 2017-D securitization, from which the Company sold a 50% interest in the Class B certificates to third parties and 2018-C securitization, from which the Company sold a 95% interest in the Class A notes and 37% in the Class B notes and trust certificates, the Company has retained the subordinate notes and the applicable trust certificates from the other six secured borrowings outstanding at March 31, 2020.

2017-D secured borrowing contains Class A notes and Class B certificates representing the residual interests in the mortgages held within the securitization trusts subsequent to repayment of the Class A debt. The Company has retained 50% of both the Class A notes and Class B certificates from 2017-D.

2018-C secured borrowing contains Class A notes, Class B notes and trust certificates representing the residual interest in the mortgages held within the securitization trusts subsequent to repayment of the Class A debt. The Company has retained 5% of the Class A notes and 63% of the Class B notes and trust certificates.

The Company's 2017-B, 2019-D and 2019-F secured borrowings carry no provision for a step-up in interest rate on any of the Class A, Class B or Class M notes.

For all of the Company's secured borrowings the Class A notes are senior, sequential pay, fixed rate notes with the exception of 2019-D and 2019-F, which are subordinate, sequential pay, fixed rate notes for Class B-1 and variable rate notes for Class B-2 and Class B-3. The interest rate is effectively the rate equal to the spread between the gross average rate of interest the trust collects on its mortgage loan portfolio minus the rate derived from the sum of the servicing fee and other expenses of the trust. The Class M notes issued under 2017-B, 2019-D and 2019-F are also mezzanine, sequential pay, fixed rate notes.

For all of the Company's secured borrowings, except 2017-B, 2019-D and 2019-F, which contains no interest rate step-up, if the Class A notes have not been redeemed by the payment date or otherwise paid in full 36 months after issue, or in the case of 2017-C, 48 months after issue, an interest rate step-up of 300 basis points is triggered. Twelve months after the 300 basis points step up is triggered, an additional 100 basis point step up will be triggered, and an amount equal to the aggregate interest payment amount that accrued and would otherwise be paid to the subordinate notes will be paid as principal to the Class A notes on that date and each subsequent payment date until the Class A notes are paid in full. After the Class A notes are paid
in full, the subordinate notes will resume receiving their respective interest payment amounts and any interest that accrued but was not paid while the Class A notes were outstanding. As the holder of the trust certificates, the Company is entitled to receive any remaining amounts in the trusts after the Class A notes and subordinate notes have been paid in full.

The following table sets forth the original terms of all notes from our secured borrowings outstanding at March 31, 2020 at their respective cutoff dates:

Issuing Trust/Issue DateInterest Rate Step-up DateSecurityOriginal PrincipalInterest Rate
Ajax Mortgage Loan Trust 2017-B/ December 2017NoneClass A notes due 2056$115.8 million  3.16 %
None
Class M-1 notes due 2056(3)
$9.7 million  3.50 %
None
Class M-2 notes due 2056(3)
$9.5 million  3.50 %
None
Class B-1 notes due 2056(1)
$9.0 million  3.75 %
None
Class B-2 notes due 2056(1)
$7.5 million  3.75 %
Trust certificates(2)
$14.3 million  — %
Deferred issuance costs$(1.8) million — %
Ajax Mortgage Loan Trust 2017-C/ November 2017November 25, 2021Class A notes due 2060$130.2 million  3.75 %
May 25, 2022
Class B-1 notes due 2060(1)
$13.0 million  5.25 %
Trust certificates(2)
$42.8 million  — %
Deferred issuance costs$(1.7) million — %
Ajax Mortgage Loan Trust 2017-D/ December 2017April 25, 2021
Class A notes due 2057(4)
$177.8 million  3.75 %
None
Class B certificates(4)
$44.5 million  — %
Deferred issuance costs$(1.1) million — %
Ajax Mortgage Loan Trust 2018-C/ September 2018October 25, 2021
Class A notes due 2065(5)
$170.5 million  4.36 %
April 25, 2022
Class B notes due 2065(5)
$15.9 million  5.25 %
Trust certificates(5)
$40.9 million  — %
Deferred issuance costs$(2.0) million — %
Ajax Mortgage Loan Trust 2019-D/ July 2019NoneClass A-1 notes due 2065$140.4 million  2.96 %
NoneClass A-2 notes due 2065$6.1 million  3.50 %
NoneClass A-3 notes due 2065$10.1 million  3.50 %
None
Class M-1 notes due 2065(3)
$9.3 million  3.50 %
None
Class B-1 notes due 2065(6)
$7.5 million  3.50 %
None
Class B-2 notes due 2065(6)
$7.1 million  
variable(7)
None
Class B-3 notes due 2065(6)
$12.8 million  
variable(7)
Deferred issuance costs$(2.7) million — %
Ajax Mortgage Loan Trust 2019-F/ November 2019NoneClass A-1 notes due 2059$110.1 million  2.86 %
NoneClass A-2 notes due 2059$12.5 million  3.50 %
NoneClass A-3 notes due 2059$5.1 million  3.50 %
None
Class M-1 notes due 2059(1)
$6.1 million  3.50 %
None
Class B-1 notes due 2059(6)
$11.5 million  3.50 %
None
Class B-2 notes due 2059(6)
$10.4 million  
variable(7)
None
Class B-3 notes due 2059(6)
$15.1 million  
variable(7)
Deferred issuance costs$(1.8) million — %

(1)The Class B notes are subordinate, sequential pay, fixed rate notes with Class B-2 notes subordinate to the Class B-1 notes. The Company has retained the Class B notes.​
(2)The trust certificates issued by the trusts and the beneficial ownership of the trusts are retained by Great Ajax Funding LLC as the depositor. As the holder of the trust certificates, the Company is entitled to receive any remaining amounts in the trusts after the Class A notes, Class M notes, where present, and Class B notes have been paid in full.
(3)The Class M notes are subordinate, sequential pay, fixed rate notes with Class M-2 notes subordinate to the Class M-1 notes. The Company has retained the Class M notes.
(4)Ajax Mortgage Loan Trust ("AJAXM") 2017-D is a joint venture in which a third party owns 50% of the Class A notes and 50% of the Class B certificates. The Company is required to consolidate 2017-D under GAAP and is reflecting 100% of the mortgage loans, in Mortgage loans, net. 50% of the Class A notes, which are held by the third party, are included in Secured borrowings, net. The 50% portion of the Class A notes retained by the Company have been encumbered under a repurchase agreement. 50% of the Class B certificates are recognized as Non-controlling interest.
(5)AJAXM 2018-C is a joint venture in which a third party owns 95% of the Class A notes and 37% of the Class B notes and certificates. The Company is required to consolidate 2018-C under GAAP and is reflecting 100% of the mortgage loans, in Mortgage loans, net. 95% of the Class A notes and 37% of the Class B notes, which are held by the third party, are included in Secured borrowings, net. The 5% portion of the Class A notes retained by the Company have been encumbered under the repurchase agreement. 37% of the Class C certificates are recognized as Non-controlling interest.
(6)The Class B notes are subordinate, sequential pay, with B-2 and B-3 notes having variable interest rates and subordinate to the Class B-1 notes. The Class B-1 notes are fixed rate notes. The Company has retained the Class B notes.
(7)The interest rate is effectively the rate equal to the spread between the gross average rate of interest the trust collects on its mortgage loan portfolio minus the rate derived from the sum of the servicing fee and other expenses of the trust.

Servicing for the mortgage loans in the Company’s secured borrowings is provided by the Servicer at servicing fee rates of between 0.65% of outstanding UPB and 1.25% of outstanding UPB at acquisition, and is paid monthly. For certain of the Company's joint ventures, the servicing fee rate for RPLs is reduced to an annual servicing fee rate of 0.42% annually on a loan-by-loan basis for any loan that makes seven consecutive payments. The determination of RPL or NPL status, which determines the servicing fee rates, is based on the status of the loan at acquisition and does not change regardless of the loan’s subsequent performance. The following table sets forth the status of the notes held by others at March 31, 2020 and December 31, 2019, and the securitization cutoff date ($ in thousands):

Balances at March 31, 2020Balances at December 31, 2019Original balances at
securitization cutoff date
Class of NotesCarrying value of mortgagesBond principal balancePercentage of collateral coverageCarrying value of mortgagesBond principal balancePercentage of collateral coverageMortgage UPBBond principal balance
2017-B$120,075  $80,325  149 %$121,909  $84,624  144 %$165,850  $115,846  
2017-C136,177  91,159  149 %137,369  94,126  146 %185,942  130,159  
2017-D140,364  57,434  (1) 244 %148,119  60,934  (1) 243 %203,870  (2) 88,903  
2018-C176,116  140,815  (3) 125 %179,303  146,925  (3) 122 %222,181  (4) 167,910  
2019-D161,705  142,980  113 %165,963  146,383  113 %193,301  156,670  
2019-F153,793  124,403  124 %155,899  126,723  123 %170,876  127,673  
​$888,230  $637,116  (5) 139 %$908,562  $659,715  (5) 138 %$1,142,020  $787,161  
​
(1)The gross amount of senior bonds at March 31, 2020 and December 31, 2019 were $114.9 million and $121.9 million however, only $57.4 million and $60.9 million are reflected in Secured borrowings as the remainder is owned by the Company, respectively.
(2)Includes $26.7 million of cash collateral intended for use in the acquisition of additional mortgage loans.
(3)2018-C contains notes held by the third party institutional investors for senior bonds and class B bonds. The gross amount of the senior and class B bonds at March 31, 2020 were $142.0 million and $15.9 million, however, only $134.9 million and $5.9 million are reflected in Secured borrowings as the remainder is owned by the Company, respectively. The gross amount of the senior and class B bonds at December 31, 2019 were $148.5 million and $15.9 million, however, only $141.0 million and $5.9 million are reflected in Secured borrowings as the remainder is owned by the Company, respectively.
(4)Includes $45.5 million of cash collateral intended for use in the acquisition of additional mortgage loans.
(5)This represents the gross amount of Secured borrowings and excludes the impact of deferred issuance costs of $6.2 million and $7.0 million as of March 31, 2020 and December 31, 2019.
​
The Company’s obligations under its secured borrowings are not fixed, and the payments on these borrowings are predicated upon cash flows received on the underlying mortgage loans.

Convertible Senior Notes
On April 25, 2017, the Company completed the issuance and sale of $87.5 million aggregate principal amount of its 7.25% convertible senior notes due 2024 in an underwritten public offering. The net proceeds to the Company from the sale of the notes, after deducting the underwriter's discounts, commissions and offering expenses, were approximately $84.9 million. The carrying amount of the equity component of the transaction was $2.5 million representing the fair value to the notes' owners of the right to convert the notes into shares of the Company's common stock. The notes were issued at a 17.5% conversion premium and bear interest at a rate of 7.25% per year, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, beginning on July 15, 2017.

On August 18, 2017, the Company completed the public offer and sale of an additional $20.5 million in aggregate principal amount of its 7.25% Convertible senior notes due 2024, which combined with the $87.5 million aggregate principal amount from its April offering, form a single series of fungible notes. The net proceeds to the Company from the August 18, 2017 sale of the notes, after deducting the underwriter's discounts, commissions and offering expenses, were approximately $20.5 million. The carrying amount of the equity component of the August transaction was $0.2 million representing the fair value to the notes' owners of the right to convert the notes into shares of the Company's common stock.

The notes in the August transaction were issued at a 6.0% conversion premium and bear interest at a rate of 7.25% per year, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, beginning on July 15, 2017. The notes will mature on April 30, 2024, unless earlier repurchased, redeemed or converted.

On November 19, 2018, the Company completed the public offer and sale of an additional $15.9 million in aggregate principal amount of its 7.25% convertible senior notes due 2024, which combined with the $108.0 million aggregate principal amount from its August and April offerings in 2017, form a single series of fungible notes. The net proceeds to the Company from the November 19, 2018 sale of the notes, after deducting the underwriter's discounts, commissions and offering expenses, were approximately $15.2 million. The carrying amount of the equity component of the November transaction was $0.5 million representing the fair value to the notes' owners of the right to convert the notes into shares of the Company's common stock.

The notes in the November transaction were issued at an 11.43% conversion premium and bear interest at a rate of 7.25% per year, payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, beginning on January 15, 2019. The notes will mature on April 30, 2024, unless earlier repurchased, redeemed or converted.

During the first quarter of 2020, the Company completed a series of convertible note repurchases for an aggregate principal amount of $8.0 million for a total purchase price $8.2 million. The carrying amount of the equity component of $0.1 million reversed from Additional paid-in Capital due to the March 2020 transaction.

Holders may convert their notes at their option prior to April 30, 2023 only under certain circumstances. In addition, the notes will be convertible irrespective of those circumstances from, and including, April 30, 2023 to, and including, the business day immediately preceding the maturity date. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company's election.

The conversion rate as of March 31, 2020 equals 1.7279 shares of the Company's common stock per $25.00 principal amount of notes which is equivalent to a conversion price of approximately $14.47 per share of common stock. The conversion rate, and thus the conversion price, may be subject to adjustment under certain circumstances. As of March 31, 2020, the amount by which the if-converted value falls short of the principal value for the entire series is $64.9 million.

The Company may not redeem the notes prior to April 30, 2022, and may redeem for cash all or any portion of the notes, at its option, on or after April 30, 2022 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No "sinking fund" will be provided for the notes.
At March 31, 2020, outstanding aggregate principal amount of the notes was $115.9 million, and discount and deferred expenses were $4.4 million. Interest expense of $2.4 million was recognized during the quarter ended March 31, 2020 which includes $0.3 million of amortization of discount and deferred expenses, respectively. The discount will be amortized through April 30, 2023, the date at which the notes can be converted by their holders. The effective interest rate of the notes for the quarter ended March 31, 2020 was 8.72%.