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Debt
 9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Senior Secured Term Loan Facilities and Warrants to Purchase Shares of Common Stock Collateralized Borrowings
To finance its loans held-for-investment, the Company has entered into a variety of financing arrangements, including repurchase agreements and an asset-specific financing facility. The Company’s repurchase agreements are collateralized by loans held-for-investment and certain cash balances. Although the transactions under repurchase agreements represent committed borrowings until maturity, the respective lender retains the right to mark the underlying collateral to fair value. A reduction in the value of pledged assets due to collateral-specific credit events, or, with respect to a limited number of the Company’s repurchase agreements, capital market events, would require the Company to fund margin calls. The Company’s asset-specific financing facility is collateralized by loans held-for-investment. The Company does not typically retain similar rights for the Company to make margin calls on its underlying borrowers as a result of a determination by the Company and/or its financing counterparty that there has been a decrease in the market value of the underlying pledged collateral.
The following tables summarize details of the Company’s collateralized borrowings outstanding as of September 30, 2020 and December 31, 2019:
September 30, 2020
(in thousands)
Maturity Date (1)
Amount OutstandingUnused CapacityTotal CapacityCarrying Value of CollateralWeighted Average Borrowing Rate
Repurchase agreements:
Morgan Stanley BankJune 28, 2021$498,181 $101,819 $600,000 $703,898 2.3 %
Goldman Sachs BankMay 2, 2021405,971 94,029 500,000 582,376 2.5 %
JPMorgan Chase BankJune 28, 2022400,880 103,226 504,106 550,025 2.8 %
CitibankJanuary 9, 2023390,767 9,233 400,000 492,830 1.8 %
Wells Fargo Bank (2)
June 28, 2021155,046 119,954 275,000 220,152 1.9 %
Total/Weighted Average$1,850,845 $428,261 $2,279,106 $2,549,281 
Asset-specific financings:
Canadian Imperial Bank of Commerce
Various$123,091 $26,909 $150,000 $152,262 2.5 %
December 31, 2019
(in thousands)
Maturity Date (1)
Amount OutstandingUnused CapacityTotal CapacityCarrying Value of CollateralWeighted Average Borrowing Rate
Repurchase agreements:
Morgan Stanley BankJune 28, 2021$556,887 $43,113 $600,000 $740,791 3.9 %
Goldman Sachs BankMay 2, 2020405,057 94,943 500,000 541,640 3.8 %
JPMorgan Chase BankJune 28, 2022408,819 41,181 450,000 553,020 3.7 %
CitibankJuly 15, 2022339,888 60,112 400,000 432,867 3.4 %
Wells Fargo Bank (2)
June 28, 2021194,113 80,887 275,000 286,672 3.5 %
JPMorgan Chase BankFebruary 10, 202019,257 NANA30,906 4.1 %
Total/Weighted Average$1,924,021 $320,236 $2,225,000 $2,585,896 
Asset-specific financings:
Canadian Imperial Bank of Commerce
Various$116,465 $33,535 $150,000 $144,322 3.5 %
Revolving credit facilities:
CitibankJuly 26, 2021$42,008 $32,992 $75,000 $80,473 4.0 %
____________________
(1)The facilities are set to mature on the stated maturity date, unless extended pursuant to their terms.
(2)As of September 30, 2020, the Company retained an option to increase the maximum facility capacity amount up to $350 million, subject to customary terms and conditions.


At September 30, 2020, the Company’s collateralized borrowings outstanding had the following remaining maturities:
September 30, 2020
(dollars in thousands)Repurchase AgreementsAsset-Specific FinancingsRevolving Credit FacilitiesTotal Amount Outstanding
Within one year$1,059,198 $— $— $1,059,198 
One to three years791,647 123,091 — 914,738 
Three to five years— — — — 
Five years and over— — — — 
Total$1,850,845 $123,091 $— $1,973,936 
The following table summarizes certain characteristics of the Company’s repurchase agreements and counterparty concentration at September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
(dollars in thousands)Amount Outstanding
Net Counterparty Exposure (1)
Percent of EquityWeighted Average Years to MaturityAmount Outstanding
Net Counterparty Exposure (1)
Percent of EquityWeighted Average Years to Maturity
Morgan Stanley Bank$498,181 $213,187 23 %0.74$556,887 $185,022 18 %1.49
JPMorgan Chase Bank400,880 157,689 17 %1.74428,076 156,764 15 %2.39
Goldman Sachs Bank405,971 183,251 20 %0.59405,057 137,326 13 %0.34
Citibank390,767 106,905 11 %2.28339,888 93,553 9 %2.54
Wells Fargo Bank155,046 67,075 7 %0.74194,113 93,004 9 %1.49
Total$1,850,845 $728,107 $1,924,021 $665,669 
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(1)Represents the excess of the carrying amount or market value of the loans held-for-investment, AFS securities and HTM securities pledged as collateral for repurchase agreements, including accrued interest plus any cash on deposit to secure the repurchase obligation, less the amount of the repurchase liability, including accrued interest. As of September 30, 2020, the Company no longer held AFS or HTM securities.
The Company does not anticipate any defaults by its financing counterparties, although there can be no assurance that one or more defaults will not occur.
Senior Secured Term Loan Facilities and Warrants to Purchase Shares of Common Stock
On September 25, 2020, the Company, as a guarantor, and certain subsidiaries of the Company, as borrowers, entered into a five-year senior secured term loan credit agreement with certain investment vehicles managed by Pacific Investment Management Company LLC providing for up to $300.0 million of new senior secured term loan facilities and warrants to purchase, in the aggregate, up to 6,065,820 shares of the Company’s common stock, $0.01 par value per share. The term loan credit agreement is guaranteed by the Company and certain of its subsidiaries and secured by certain of their unencumbered assets and pledges of certain equity interests held by the Company and its subsidiaries. The loans outstanding under the term loan facilities are non-amortizing and may be voluntarily repaid, in whole or in part, at any time subject to certain prepayment premiums if they are repaid prior to September 25, 2023.
On September 28, 2020, the Company borrowed $225.0 million under the initial term loan facility. The remaining $75.0 million of commitments under the term loan facilities are available to the Company on a delayed draw basis during the sixth-month period after September 25, 2020, which period may be extended for an additional six months upon payment of an extension fee. A portion of the warrants exercisable for 1,516,455 shares of common stock are subject to (i) vesting on a pro rata basis as draws occur under the delayed draw term loan facility or (ii) forfeiture on a pro rata basis to the extent of commitments under the delayed draw term loan facility that are ultimately terminated or undrawn. The net proceeds from the initial term loan facility were approximately $210.2 million after deducting discounts and expenses, which were capitalized as debt issuance costs. Interest on the outstanding loans under the term loan facilities is payable quarterly in arrears and accrues at the rate of (i) 8.00% per annum for any period for which accrued interest is paid in cash or (ii) 9.00% per annum for any period for which the borrowers elect to pay up to 50% of accrued interest in kind by adding such interest to the principal amount of the loans. The term loan facilities will mature on September 25, 2025.
The warrants issued in conjunction with entering into the term loan credit agreement are exercisable at the holder’s option at any time and from time to time on or after September 25, 2021, in whole or in part at an initial exercise price of $6.47 per share of common stock, subject to certain antidilution adjustments. The warrants will expire on September 25, 2026.
The Company recorded the value of the term loan facilities and the warrants on a relative fair value basis. The estimated fair value of the warrants at the date of issuance was approximately $4.5 million and was recognized as a discount to the term loan facilities. See Note 15 - Stockholders’ Equity and Note 19 - Earnings Per Share for further details. The consolidated carrying value of the senior secured term loan facilities as of September 30, 2020 was $205.6 million, net of deferred issuance costs.
The table below summarizes the net carrying amount of the term loan facilities:
September 30,December 31,
(in thousands)20202019
Principal outstanding$225,000 $— 
Less: Unamortized debt discount and issuance costs19,353 — 
Net carrying value$205,647 $— 
The term loan credit agreement contains various affirmative and negative covenants, which are applicable to the Company, the borrowers and their respective subsidiaries, including limitations (subject to exceptions) on their ability to: (i) incur indebtedness; (ii) incur liens on their assets; (iii) consummate certain fundamental changes; (iv) dispose of all or any part of their assets; (v) pay dividends or other distributions with respect to their equity interests; (vi) make investments; (vii) enter into transactions with their affiliates; (viii) modify the terms of the Company’s existing convertible notes, any refinancings thereof or any subordinated or junior lien indebtedness, or prepay any such indebtedness; and (ix) enter into certain burdensome agreements.
The term loan credit agreement also contains financial covenants that are substantially similar to the financial covenants under the Company’s repurchase agreements and asset-specific financing facility. If the Company fails to meet or satisfy any of the covenants in accordance with the term loan credit agreement and is unable to obtain a waiver or other suitable relief from the lenders, the Company would be in default and the Company’s lenders could elect to declare outstanding amounts due and payable.
The Company was in compliance with all financial covenants as of September 30, 2020.