The Company has a capital lease transaction secured by certain fixed assets and capitalized software. The capital lease matures on June 13, 2022 and bears interest at a spread over one-month LIBOR.

The Company, through the Issuer Trust described in Note 4 – Transactions with Affiliates—Transactions with PMT—Investing Activities and Note 12—Short-Term Borrowings—Assets Sold Under Agreements to Repurchase, issued the GMSR GT1 and the GMSR GT2 term notes (the “Term Notes”) to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”). The Term Notes rank pari passu with each other and with the VFN issued by the Issuer Trust to PLS and are secured by certain participation certificates relating to Ginnie Mae mortgage servicing assets that are financed pursuant to the GNMA MSR Facility.

(1)	Spread over one-month LIBOR.

(2)	The Term Notes’ indentures provide the Company with the option to extend the maturity of the Term Notes by two years after the stated maturity.

MSR Note Payable

On February 1, 2018, the Company issued a note payable that was secured by Freddie Mac MSRs. Interest is charged at a rate based on LIBOR plus the applicable contract margin. The facility expired on November 19, 2021. The maximum amount that the Company was able to borrow under the note payable was $400 million, less any amount outstanding under the agreements to repurchase pursuant to which the Company finances the Ginnie Mae MSRs and servicing advances and the Fannie Mae MSRs. The Company did not borrow under this note payable during the years presented.

Notes payable secured by mortgage servicing assets are summarized below:


	Year ended December 31,
	2021		2020		2019

	(dollars in thousands)
Average balance	$	1,300,000	$	1,300,000	$	1,300,000
Weighted average interest rate (1)		2.89%		3.42%		5.08%
Total interest expense	$	39,782	$	46,222	$	67,789

(1)	Excludes the effect of amortization of debt issuance costs totaling $2.2 million, $1.8 million and $1.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.


	December 31,
	2021		2020

	(dollars in thousands)
Carrying value:
Unpaid principal balance	$	1,300,000	$	1,300,000
Unamortized debt issuance costs		(2,378)		(4,160)
	$	1,297,622	$	1,295,840
Weighted average interest rate		2.84%		2.93%
Assets pledged to secure notes payable (1) (2):
Servicing advances	$	232,107	$	413,484
Mortgage servicing rights	$	3,856,791	$	2,421,326
Deposits	$	36,632	$	153,054

(1)

Beneficial interests in the Ginnie Mae MSRs, servicing advances and deposits are pledged to the Issuer Trust and together serve as the collateral backing the VFN, GMSR Servicing Advance Notes and the Term Notes. The VFN financing and the GMSR Servicing Advance Notes are included in Assets sold under agreements to repurchase and the Term Notes are included in Notes payable secured by mortgage servicing assets on the Company's consolidated balance sheets.

(2)

Beneficial interests in the Fannie Mae MSRs are pledged to the PFSI Issuer Trust - FMSR and serve as the collateral backing the FMSR VFN and any FMSR Term Notes. The FMSR VFN financing is included in Assets sold under agreements to repurchase and the FMSR Term Note is included in Notes payable secured by mortgage servicing assets on the Company's consolidated balance sheets.

Unsecured Senior Notes

The Company issued unsecured senior notes (the “Unsecured Notes”) to qualified institutional buyers under Rule 144A of the Securities Act. The Unsecured Notes are senior unsecured obligations of the Company and will rank senior in right of payment to any future subordinated indebtedness of the Company, equally in right of payment with all existing and future senior indebtedness of the Company and effectively subordinated to any future secured indebtedness of the Company to the extent of the fair value of collateral securing such indebtedness.

The Unsecured Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by PFSI’s existing and future wholly-owned domestic subsidiaries (other than certain excluded subsidiaries defined in the indenture under which the Unsecured Notes were issued). The guarantees are senior unsecured obligations of the guarantors and will rank senior in right of payment to any future subordinated indebtedness of the guarantors, equally in right of payment with all existing and future senior indebtedness of the guarantors and effectively subordinated to any future secured indebtedness of the guarantors to the extent of the fair value of collateral securing such indebtedness. The Unsecured Notes and the guarantees are structurally subordinated to the indebtedness and liabilities of the Company’s subsidiaries that do not guarantee the Unsecured Notes.

Following is a summary of the Company’s issued and outstanding Unsecured Notes:


Issuance date	Principal balance		Coupon interest rate	Maturity date	Optional redemption date (1)
	(in thousands)		(annual)
September 29, 2020	$	500,000	5.38%	October 15, 2025	October 15, 2022
October 19, 2020		150,000	5.38%	October 15, 2025	October 15, 2022
February 11, 2021		650,000	4.25%	February 15, 2029	February 15, 2024
September 16, 2021		500,000	5.75%	September 15, 2031	September 15, 2026
	$	1,800,000

(1)

Before the optional redemption date, the Company may redeem some or all of the Unsecured Notes for that issuance at a price equal to 100% of the principal amount, plus accrued and unpaid interest and a make-whole premium or the Company may redeem up to 40% of the Unsecured Notes for that issuance with an amount equal to or less than the net proceeds from certain equity offerings at the redemption price set forth in the indenture, plus accrued and unpaid interest. On or after the optional redemption date, the Company may redeem some or all of the Unsecured Notes for that issuance at the redemption prices set forth in the indenture, plus accrued and unpaid interest.


	Year ended December 31,
	2021		2020

	(dollars in thousands)
Average balance	$	1,373,562	$	158,743
Weighted average interest rate (1)		4.94%		5.38%
Total interest expense	$	70,208	$	8,774

(1)	Excludes the effect of amortization of debt issuance costs of $2.3 million and $225,000 for the years ended December 31, 2021 and 2020, respectively.


	December 31,
	2021		2020

	(dollars in thousands)
Carrying value:
Unpaid principal balance	$	1,800,000	$	650,000
Unamortized debt issuance costs and premiums, net		(23,781)		(4,180)
	$	1,776,219	$	645,820
Weighted average interest rate		5.07%		5.38%

Maturities of Long-Term Debt

Maturities of long-term debt obligations (based on final maturity dates) are as follows:


	Year ended December 31,
	2022		2023		2024		2025		2026		Thereafter		Total

	(in thousands)
Obligations under capital lease	$	3,489	$	—	$	—	$	—	$	—	$	—	$	3,489
Notes payable secured by mortgage servicing assets		—		1,300,000		—		—		—		—		1,300,000
Unsecured Notes		—		—		—		650,000		—		1,150,000		1,800,000
Total	$	3,489	$	1,300,000	$	—	$	650,000	$	—	$	1,150,000	$	3,103,489