The Company, through its wholly-owned subsidiaries PLS, PNMAC, and the PNMAC GMSR ISSUER TRUST (“Issuer Trust”) have entered into a structured finance transaction, in which PLS pledges and/or sells to the Issuer Trust participation certificates representing beneficial interests in Ginnie Mae mortgage servicing assets pursuant to a repurchase agreement. The Issuer Trust has issued a variable funding note to PLS, has issued secured term notes (the “Term Notes”) to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and has entered into a series of syndicated term loans with various lenders (the “Term Loans”). The Term Notes and Term Loans are secured by participation certificates relating to Ginnie Mae mortgage servicing assets financed pursuant to the servicing asset repurchase facilities, and rank pari passu with the servicing assets repurchase facilities.

(1)	The Term Notes and Term Loans’ indentures provide the Company with the option to extend the maturity of the Term Notes or Term Loans specified in the respective agreements.

(2)	London Interbank Offered Rate (“LIBOR”).

(3)	Stated maturity date reflects the exercise by the Company of its option to extend the maturity of this issuance.

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:


	Quarter ended March 31,
	2023		2022

	(dollars in thousands)
Average balance	$	2,092,056	$	1,300,000
Weighted average interest rate (1)		7.72%		2.95%
Total interest expense	$	40,778	$	9,909

(1)	Excludes the effect of amortization of debt issuance costs totaling $932,000 and $459,000 for the quarters ended March 31, 2023 and 2022, respectively.


	March 31,		December 31,
	2023		2022

	(dollars in thousands)
Carrying value:
Unpaid principal balance:
Term Notes and Term Loans	$	2,480,000	$	1,800,000
MSR Note Payable		—		150,000
		2,480,000		1,950,000
Unamortized debt issuance costs		(8,070)		(7,354)
	$	2,471,930	$	1,942,646
Weighted average interest rate		8.21%		7.46%
Assets pledged to secure notes payable (1):
Servicing advances	$	315,323	$	381,379
Mortgage servicing rights	$	5,954,749	$	5,897,613
Deposits	$	21,074	$	12,277

(1)

Beneficial interests in the Ginnie Mae MSRs, servicing advances and deposits together serve as the collateral backing servicing asset facilities that are included in Assets sold under agreements to repurchase and the Term Notes and Term Loans included in Notes payable secured by mortgage servicing assets.

Unsecured Senior Notes

The Company has 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 subordinate 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 subordinate 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 interest.


	Quarter ended March 31,
	2023		2022

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

(1)	Excludes the effect of amortization of debt issuance costs of $913,000 for each of the quarters ended March 31, 2023 and 2022.


	March 31,		December 31,
	2023		2022

	(dollars in thousands)
Carrying value:
Unpaid principal balance	$	1,800,000	$	1,800,000
Unamortized debt issuance costs and premiums, net		(19,167)		(20,080)
	$	1,780,833	$	1,779,920
Weighted average interest rate		5.07%		5.07%

Maturities of Long-Term Debt

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


	Twelve months ended March 31,
	2024		2025		2026		2027		2028		Thereafter		Total

	(in thousands)
Notes payable secured by mortgage servicing assets (1)	$	650,000	$	650,000	$	—	$	—	$	1,180,000	$	—	$	2,480,000
Unsecured senior notes		—		—		650,000		—		—		1,150,000		1,800,000
Total	$	650,000	$	650,000	$	650,000	$	—	$	1,180,000	$	1,150,000	$	4,280,000

(1)	The Term Notes and Term Loans’ indentures provide the Company with the option to extend the maturity of the Term Notes and Term Loans as specified in the respective agreements.

Obligation Under Capital Lease

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

Obligations under capital lease are summarized below:


	Quarter ended
		March 31, 2022
		(dollars in thousands)
Average balance		$	2,791
Weighted average interest rate			2.15%
Total interest expense		$	15
Maximum daily amount outstanding		$	3,489