Short-Term Debt

12 Months Ended

Dec. 31, 2022

We enter into repurchase agreements ("repo"), loan warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and major investment banking firms. At December 31, 2022, 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, 2022 and 2021.

Table 14.1 – Short-Term Debt


	December 31, 2022
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate (1)		Maturity(2)	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse	7	$	703,406	$	2,550,000	6.16	%	3/2023 - 12/2023	267

Business purpose loan warehouse	4	680,100		1,650,000		6.93	%	3/2023 - 9/2023	179
Real estate securities repo	7	124,909		—		5.22	%	1/2023 - 3/2023	27
HEI warehouse	1	111,681		150,000		8.54	%	11/2023	306

Total Short-Term Debt Facilities	19	1,620,096
Servicer advance financing	1	206,510		290,000		6.67	%	11/2023	305
Promissory notes	N/A	27,058		—		6.64	%	N/A	N/A
Convertible notes, net	N/A	176,015		—		4.75	%	8/2023	227
Total Short-Term Debt		$	2,029,679


	December 31, 2021
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate (1)		Maturity	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse	7	$	1,669,344	$	2,900,000	1.87	%	1/2022-12/2022	153

Business purpose loan warehouse	2	138,746		350,000		3.34	%	3/2022-7/2022	105
Real estate securities repo	4	74,825		—		1.13	%	1/2022-3/2022	33
Total Short-Term Debt Facilities	13	1,882,915
Servicer advance financing	1	294,447		350,000		1.90	%	11/2022	306
Convertible notes, net	N/A	—
Total Short-Term Debt		$	2,177,362

(1)Borrowings under our facilities generally are uncommitted and charged interest based on a specified margin over SOFR at December 31, 2022 or 1- or 3-month LIBOR at December 31, 2021.

(2)Promissory notes payable on demand to lender with 90-day notice.

The following table below presents the value of loans, securities, and other assets pledged as collateral under our short-term debt facilities at December 31, 2022 and 2021.

Table 14.2 – Collateral for Short-Term Debt


(In Thousands)	December 31, 2022		December 31, 2021
Collateral Type
Held-for-sale residential loans	$	775,545	$	1,838,797
Business purpose loans	871,072		167,687
HEI	191,278		—
Real estate securities
On balance sheet	72,133		5,823
Sequoia securitizations (1)	74,170		61,525
Freddie Mac K-Series securitization (1)	31,767		31,657
Total real estate securities owned	178,070		99,005
Restricted cash and other assets	1,097		1,962
Total Collateral for Short-Term Debt Facilities	2,017,062		2,107,451
Cash	12,713		6,480
Restricted cash	—		25,420
Servicer advances	269,259		310,953
Total Collateral for Servicer Advance Financing	281,972		342,853
Total Collateral for Short-Term Debt	$	2,299,034	$	2,450,304

(1)Represents securities we 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, 2022 and 2021, the average balances of our short-term debt facilities were $1.65 billion and $1.67 billion, respectively. At December 31, 2022 and 2021, accrued interest payable on our short-term debt facilities was $7 million and $2 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, 2022, the accrued interest payable balance on this financing was $0.5 million and the unamortized capitalized commitment costs were $1 million.

In connection with our acquisition of Riverbend, we assumed $43 million of promissory notes which are payable on demand with 90-days' prior notice from the lender or which may be repaid by us with 90-days' prior notice. These unsecured, non-marginable, recourse notes were issued in three separate series with fixed interest rates between 6% and 8%. During the year ended December 31, 2022, we repaid $16 million of principal of these notes.

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 $1 million at December 31, 2022. At both December 31, 2022 and 2021, we had no outstanding borrowings on this facility.

During the year ended December 31, 2022, business purpose loan warehouse facilities with a borrowing limits of $900 million, were reclassified to short-term debt from long-term debt as the maturity of these facilities became less than one year.

During the year ended December 31, 2022, $199 million principal amount of 4.75% convertible debt 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 August 2022. During the fourth quarter of 2022, we repurchased $22 million of convertible debt and recorded a $0.4 million dollar gain on extinguishment.

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 at December 31, 2022.

Table 14.3 – Short-Term Debt by Collateral Type and Remaining Maturities


	December 31, 2022
(In Thousands)	Within 30 days		31 to 90 days		Over 90 days		Total
Collateral Type
Held-for-sale residential loans	$	—	$	186,287	$	517,120	$	703,407
Business purpose loans	—		267,588		412,512		680,100
Real estate securities	89,216		35,693		—		124,909

HEI warehouse	—		—		111,681		111,681
Total Secured Short-Term Debt	89,216		489,567		1,041,313		1,620,096
Servicer advance financing	—		—		206,510		206,510
Promissory notes	—		27,058		—		27,058
Convertible notes, net	—		—		176,015		176,015
Total Short-Term Debt	$	89,216	$	516,625	$	1,423,838	$	2,029,679