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 – Related Party Transactions—Transactions with PMT—Investing Activities and Note 12—Short-Term Debt—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.

Notes payable secured by mortgage servicing assets are summarized below:


	Quarter ended March 31,
	2022		2021

	(dollars in thousands)
Average balance	$	1,300,000	$	1,300,000
Weighted average interest rate (1)		2.95%		2.88%
Total interest expense	$	9,909	$	9,888

(1)	Excludes the effect of amortization of debt issuance costs totaling $459,000 and $544,000 for the quarters ended March 31, 2022 and 2021, respectively.


	March 31,		December 31,
	2022		2021

	(dollars in thousands)
Carrying value:
Unpaid principal balance	$	1,300,000	$	1,300,000
Unamortized debt issuance costs		(1,933)		(2,378)
	$	1,298,067	$	1,297,622
Weighted average interest rate		3.21%		2.84%
Assets pledged to secure notes payable (1) (2):
Servicing advances	$	230,395	$	232,107
Mortgage servicing rights	$	4,246,586	$	3,856,791
Deposits	$	36,106	$	36,632

(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 outstanding 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 outstanding Unsecured Notes issued:


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.


	Quarter ended March 31,
	2022		2021

	(dollars in thousands)
Average balance	$	1,800,000	$	1,003,889
Weighted average interest rate (1)		5.07%		4.91%
Total interest expense	$	23,428	$	12,670

(1)	Excludes the effect of amortization of debt issuance costs of $913,000 and $347,000 for the quarters ended March 31, 2022 and 2021, respectively.


	March 31,		December 31,
	2022		2021

	(dollars in thousands)
Carrying value:
Unpaid principal balance	$	1,800,000	$	1,800,000
Unamortized debt issuance costs and premiums, net		(22,868)		(23,781)
	$	1,777,132	$	1,776,219
Weighted average interest rate		5.07%		5.07%

Maturities of Long-Term Debt

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


	Twelve months ended March 31,
	2023		2024		2025		2026		2027		Thereafter		Total

	(in thousands)
Obligations under capital lease	$	1,396	$	—	$	—	$	—	$	—	$	—	$	1,396
Notes payable secured by mortgage servicing assets		650,000		650,000		—		—		—		—		1,300,000
Unsecured senior notes		—		—		—		650,000		—		1,150,000		1,800,000
Total	$	651,396	$	650,000	$	—	$	650,000	$	—	$	1,150,000	$	3,101,396