Short-Term Debt

12 Months Ended

Dec. 31, 2019

We enter into repurchase agreements, bank warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and major investment banking firms. At December 31, 2019, we had outstanding agreements with several counterparties and we were in compliance with all of the related covenants.

The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at December 31, 2019 and December 31, 2018.

Table 13.1 – Short-Term Debt



	December 31, 2019
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate		Maturity	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse ⁽¹⁾	4	$	185,894	$	1,425,000	3.23	%	1/2020-10/2020	69
Business purpose residential loan warehouse ⁽²⁾	8	814,118		1,475,000		4.11	%	12/2020-5/2022	489
Real estate securities repo ⁽¹⁾	10	1,176,579		—		2.94	%	1/2020-3/2020	23
Total Short-Term Debt Facilities	22	2,176,591
Servicer advance financing	1	152,554		400,000		3.56	%	11/2020	335
Total Short-Term Debt		$	2,329,145



	December 31, 2018
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate		Maturity	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse ⁽¹⁾	4	$	860,650	$	1,425,000	4.10	%	2/2019-12/2019	178
Business purpose residential loan warehouse ⁽²⁾	4	88,380		480,000		4.99	%	11/2019-6/2021	594
Real estate securities repo ⁽¹⁾	9	988,890		—		3.47	%	1/2019-3/2019	26
Total Short-Term Debt Facilities	17	1,937,920
Servicer advance financing	1	262,740		350,000		4.32	%	11/2019	333
Convertible notes, net	N/A	199,619				5.63	%	11/2019	319
Total Short-Term Debt		$	2,400,279


(1)	Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At December 31, 2019, all of these borrowings were under uncommitted facilities and were due within 364 days (or less) of the borrowing date.


(2)	Due to the revolving nature of the borrowings under these facilities, we have classified these facilities as short-term debt at December 31, 2019. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations.

The following table below presents the value of loans and securities pledged as collateral under our short-term debt facilities at December 31, 2019 and December 31, 2018.

Table 13.2 – Collateral for Short-Term Debt



(In Thousands)	December 31, 2019		December 31, 2018
Collateral Type
Held-for-sale residential loans	$	201,949	$	935,132
Business purpose residential loans	988,179		125,404
Real estate securities
On balance sheet	618,881		844,465
Sequoia Choice securitizations ⁽¹⁾	111,341		130,139
Freddie Mac SLST securitizations ⁽¹⁾	381,640		228,920
Freddie Mac K-Series securitizations ⁽¹⁾	252,284		17,521
CAFL securitizations ⁽¹⁾	127,840		—
Total real estate securities owned	1,491,986		1,221,045
Total Collateral for Short-Term Debt	$	2,682,114	$	2,281,581


(1)	Represents securities we have retained from consolidated securitization entities. For GAAP purposes, we consolidate the loans and non-recourse ABS debt issued from these securitizations.

For the years ended December 31, 2019 and 2018, the average balances of our short-term debt facilities were $1.97 billion and $1.51 billion, respectively. At December 31, 2019 and December 31, 2018, accrued interest payable on our short-term debt facilities was $6 million and $4 million, respectively.

Servicer advance financing consists of non-recourse short-term securitization debt used to finance servicer advance investments. We consolidate the securitization entity that issued the debt, but the entity is independent of Redwood and the assets and liabilities are not owned by and are not legal obligations of Redwood. At December 31, 2019, the fair value of servicer advances, cash and restricted cash collateralizing the securitization financing was $176 million. At December 31, 2019, the accrued interest payable balance on this financing was $0.2 million and the unamortized capitalized commitment costs were $1 million.

During the fourth quarter of 2018, $201 million principal amount of 5.625% exchangeable senior notes and $1 million of unamortized deferred issuance costs were reclassified from long-term debt to short-term debt as the maturity of the notes was less than one year as of November 2018. In November 2019, we repaid these $201 million convertible notes and all related accrued interest in full.

We also maintain a $10 million committed line of credit with a financial institution that is secured by certain mortgage-backed securities with a fair market value of $3 million at December 31, 2019. At both December 31, 2019 and December 31, 2018, we had no outstanding borrowings on this facility.

Remaining Maturities of Short-Term Debt

The following table presents the remaining maturities of our secured short-term debt by the type of collateral securing the debt as well as our convertible notes at December 31, 2019.

Table 13.3 – Short-Term Debt by Collateral Type and Remaining Maturities



	December 31, 2019
(In Thousands)	Within 30 days		31 to 90 days		Over 90 days		Total
Collateral Type
Held-for-sale residential loans	$	49,084	$	110,446	$	26,364	$	185,894
Business purpose residential loans	—		—		814,118		814,118
Real estate securities	824,054		352,525		—		1,176,579
Total Secured Short-Term Debt	873,138		462,971		840,482		2,176,591
Servicer advance financing	—		—		152,554		152,554
Total Short-Term Debt	$	873,138	$	462,971	$	993,036	$	2,329,145