In connection with the GNMA MSR Facility, 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, the GMSR GT2 and the 2022 GT1 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 are secured by participation certificates relating to Ginnie Mae mortgage servicing assets financed pursuant to the GNMA MSR Facility, and rank pari passu with the VFNs and the GMSR Servicing Advance Notes.

(1)	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.

(2)	In January 2023, the Company exercised its option to extend the maturity for two years.

MSR Note Payable

On December 16, 2022, the Company issued a note payable that is secured by Freddie Mac MSRs. Interest is charged at a rate based on SOFR plus a spread as defined in the agreement. The facility expires on November 13, 2024. The maximum amount that the Company may borrow under the note payable is $400 million, $350 million of which is committed and which may be reduced by other debt outstanding with the counterparty.

Notes payable secured by mortgage servicing assets are summarized below:


	Year ended December 31,
	2022		2021		2020

	(dollars in thousands)
Average balance	$	1,584,383	$	1,300,000	$	1,300,000
Weighted average interest rate (1)		4.88%		2.89%		3.42%
Total interest expense	$	79,813	$	39,782	$	46,222

(1)	Excludes the effect of amortization of debt issuance costs totaling $2.5 million, $2.2 million and $1.8 million for the years ended December 31, 2022, 2021 and 2020, respectively.


	December 31,
	2022		2021

	(dollars in thousands)
Carrying value:
Unpaid principal balance:
Term Notes	$	1,800,000	$	1,300,000
MSR Note Payable		150,000		—
		1,950,000		1,300,000
Unamortized debt issuance costs		(7,354)		(2,378)
	$	1,942,646	$	1,297,622
Weighted average interest rate		7.46%		2.84%
Assets pledged to secure notes payable (1):
Servicing advances	$	381,379	$	232,107
Mortgage servicing rights	$	5,897,613	$	3,856,791
Deposits	$	12,277	$	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 for the VFN, the GMSR Servicing Advance Notes and any outstanding Term Notes. The VFN financing and the GMSR Servicing Advance Notes financing 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.

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 existing and 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 existing and 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,
	2022		2021		2020

	(dollars in thousands)
Average balance	$	1,800,000	$	1,373,562	$	158,743
Weighted average interest rate (1)		5.07%		4.94%		5.38%
Total interest expense	$	95,014	$	70,208	$	8,774

(1)	Excludes the effect of amortization of debt issuance costs of $3.7 million, $2.3 million and $225,000 for the years ended December 31, 2022, 2021 and 2020, respectively.


	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		(20,080)		(23,781)
	$	1,779,920	$	1,776,219
Weighted average interest rate		5.07%		5.07%

Obligations Under Capital Lease

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

Obligations under capital lease are summarized below:


	Year ended December 31,
	2022		2021		2020

	(dollars in thousands)
Average balance	$	848	$	7,999	$	16,224
Weighted average interest rate		2.18%		2.11%		2.62%
Total interest expense	$	20	$	169	$	425
Maximum daily amount outstanding	$	3,489	$	11,864	$	20,810


	December 31,
	2021
	(dollars in thousands)
Unpaid principal balance	$	3,489
Weighted average interest rate		2.11%
Assets pledged to secure obligations under capital lease:
Capitalized software	$	4,546
Furniture, fixtures and equipment	$	4,116

Maturities of Long-Term Debt

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


	Year ended December 31,
	2023		2024		2025		2026		2027		Thereafter		Total

	(in thousands)
Notes payable secured by mortgage servicing assets (1)	$	1,300,000	$	150,000	$	—	$	—	$	500,000	$	—	$	1,950,000
Unsecured senior notes		—		—		650,000		—		—		1,150,000		1,800,000
Total	$	1,300,000	$	150,000	$	650,000	$	—	$	500,000	$	1,150,000	$	3,750,000

(1)	The Term Notes’ indentures provide the Company with the option to extend the maturity of the Term Notes by two years after their stated maturities. In January 2023, the Company exercised its option to extend the maturity of $650 million Term Notes originally due on February 25, 2023 for two years.