Short-Term Debt

3 Months Ended

Mar. 31, 2023

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 March 31, 2023, 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 March 31, 2023 and December 31, 2022.

Table 14.1 – Short-Term Debt


	March 31, 2023
(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	6	$	25,590	$	1,750,000	6.83	%	5/2023-12/2023	229

Business purpose loan warehouse	4	777,067		1,650,000		7.31	%	5/2023-9/2023	112
Real estate securities repo	7	325,549		—		6.11	%	4/2023-6/2023	28
HEI warehouse	1	125,071		150,000		9.39	%	11/2023	216
Total Short-Term Debt Facilities	18	1,253,277
Servicer advance financing	1	197,883		290,000		7.04	%	11/2023	215
Promissory notes	N/A	21,808		—		6.76	%	N/A	N/A
Convertible notes, net	N/A	143,484		—		4.75	%	8/2023	137
Total Short-Term Debt		$	1,616,452


	December 31, 2022
(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	$	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

(1)Borrowings under our facilities generally are uncommitted and charged interest based on a specified margin over SOFR.

(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 at March 31, 2023 and December 31, 2022.

Table 14.2 – Collateral for Short-Term Debt


(In Thousands)	March 31, 2023		December 31, 2022
Collateral Type
Held-for-sale residential loans	$	26,282	$	775,545
Business purpose loans	1,021,051		871,072
HEI	215,517		191,278
Real estate securities
On balance sheet	71,017		72,133
Sequoia securitizations (1)	110,821		74,170
Freddie Mac SLST securitizations (1)	247,970		—
Freddie Mac K-Series securitization (1)	32,130		31,767

Total real estate securities owned	461,938		178,070
Restricted cash and other assets	2,023		1,097
Total Collateral for Short-Term Debt Facilities	1,726,811		2,017,062
Cash	17,329		12,713
Restricted cash	—		—
Servicer advances	269,259		269,259
Total Collateral for Servicer Advance Financing	286,588		281,972
Total Collateral for Short-Term Debt	$	2,013,399	$	2,299,034

(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 three months ended March 31, 2023, the average balance of our short-term debt facilities was $1.17 billion. At March 31, 2023 and December 31, 2022, accrued interest payable on our short-term debt facilities was $7 million.

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 March 31, 2023, the accrued interest payable balance on this financing was $0.5 million and the unamortized capitalized commitment costs were $0.5 million.

In connection with our acquisition of Riverbend, we assumed $43 million of promissory notes which are payable on demand with a 90-day notice from the lender or which may be repaid by us with a 90-day notice. These unsecured, non-marginable, recourse notes were issued in three separate series with fixed interest rates between 6% and 8%. During the three months ended March 31, 2023, we repaid $5 million of principal of these notes.

During the three months ended March 31, 2023, we repurchased $33 million of convertible debt due in 2023 and recorded a $0.1 million gain on extinguishment. At March 31, 2023 the outstanding principal balance of our convertible debt due in August 2023 was $144 million.

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 March 31, 2023.

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


	March 31, 2023
(In Thousands)	Within 30 days		31 to 90 days		Over 90 days		Total
Collateral Type
Held-for-sale residential loans	$	—	$	—	$	25,590	$	25,590
Business purpose loans	—		497,066		280,001		777,067
Real estate securities	276,367		49,182		—		325,549
HEI warehouse	—		—		125,071		125,071
Total Secured Short-Term Debt	276,367		546,248		430,662		1,253,277
Servicer advance financing	—		—		197,883		197,883
Promissory notes	—		21,808		—		21,808
Convertible notes, net	—		—		143,484		143,484
Total Short-Term Debt	$	276,367	$	568,056	$	772,029	$	1,616,452