es Payable



						Successor				Predecessor
						December 31, 2018				December 31, 2017
Advance Facilities	Interest Rate	Maturity Date	Collateral	Capacity Amount		Outstanding		Collateral Pledged		Outstanding		Collateral pledged
Nationstar agency advance receivables trust	LIBOR+1.5% to 2.6%	December 2020	Servicing advance receivables	$	350	$	218	$	255	$	416	$	492
Nationstar mortgage advance receivable trust	LIBOR+1.5% to 6.5%	August 2021	Servicing advance receivables	325		209		284		230		287
MBS servicer advance facility (2014)	CPRATE+2.5%	December 2019	Servicing advance receivables	125		90		149		44		140
Nationstar agency advance financing facility	LIBOR+1.5%	July 2020	Servicing advance receivables	125		78		89		102		117
MBS advance financing facility	LIBOR+2.5%	March 2019	Servicing advance receivables	—		—		—		63		64
Advance facilities principal amount						595		$	777	855		$	1,100
Unamortized debt issuance costs						—				—
Advance facilities, net						$	595			$	855



						Successor					Predecessor
						December 31, 2018					December 31, 2017
Warehouse Facilities	Interest Rate	Maturity Date	Collateral	Capacity Amount		Outstanding			Collateral Pledged		Outstanding			Collateral pledged
$1,200 warehouse facility	LIBOR+1.9% to 3.8%	March 2019	Mortgage loans or MBS	$	1,200	$	464		$	514	$	889		$	960
$1,000 warehouse facility	LIBOR+1.6% to 2.5%	September 2019	Mortgage loans or MBS	1,000		137			140		299			308
$950 warehouse facility	LIBOR+1.7% to 3.5%	November 2019	Mortgage loans or MBS	950		560			622		721			785
$600 warehouse facility	LIBOR+2.5%	February 2020	Mortgage loans or MBS	600		151			168		333			347
$500 warehouse facility	LIBOR+2.0% to 2.3%	September 2020	Mortgage loans or MBS	500		290			299		—			—
$500 warehouse facility	LIBOR+1.5% to 2.8%	November 2019	Mortgage loans or MBS	500		220			248		305			337
$500 warehouse facility	LIBOR+1.5% to 3.0%	April 2019	Mortgage loans or MBS	500		187			200		246			272
$500 warehouse facility	LIBOR+1.8% to 2.8%	August 2019	Mortgage loans or MBS	500		119			122		233			239
$300 warehouse facility	LIBOR+2.3%	January 2020	Mortgage loans or MBS	300		103			132		116			141
$200 warehouse facility	LIBOR+1.3%	April 2019	Mortgage loans or MBS	200		18			19		80			81
$40 warehouse facility	LIBOR+3.0%	November 2019	Mortgage loans or MBS	40		1			2		4			6
						2,250			2,466		3,226			3,476
MSRs
$200 warehouse facility⁽¹⁾	LIBOR+3.8%	March 2019	Mortgage loans or MBS	200		—			430		—			377
$200 warehouse facility	LIBOR+4.0%	June 2020	Mortgage loans or MBS	200		100			928		50			594
$175 warehouse facility	LIBOR+2.3%	December 2020	Mortgage loans or MBS	175		—			226		—			200
$50 warehouse facility	LIBOR+4.5%	August 2020	Mortgage loans or MBS	50		—			102		10			90
						100			1,686		60			1,261
Warehouse facilities principal amount						2,350			$	4,152	3,286			$	4,737
Unamortized debt issuance costs						(1		)			(1		)
Warehouse facilities, net						$	2,349				$	3,285

Pledged Collateral:
Mortgage loans held for sale and mortgage loans held for investment						$	1,528		$	1,628	$	1,792		$	1,901
Reverse mortgage interests						722			838		1,434			1,575
MSRs						100			1,686		60			1,261


⁽¹⁾	The capacity amount of this facility is a sublimit of the $1,200 warehouse facility.

Unsecured Senior Notes

Unsecured senior notes consist of the following:



	Successor			Predecessor
	December 31, 2018			December 31, 2017
$950 face value, 8.125% interest rate payable semi-annually, due July 2023⁽¹⁾	$	950		$	—
$750 face value, 9.125% interest rate payable semi-annually, due July 2026⁽¹⁾	750			—
$600 face value, 6.500% interest rate payable semi-annually, due July 2021⁽²⁾	592			595
$300 face value, 6.500% interest rate payable semi-annually, due June 2022⁽²⁾	206			206
$475 face value, 6.500% interest rate payable semi-annually, due August 2018⁽³⁾	—			364
$400 face value, 7.875% interest rate payable semi-annually, due October 2020⁽³⁾	—			397
$375 face value, 9.625% interest rate payable semi-annually, due May 2019⁽³⁾	—			323
Unsecured senior notes principal amount	2,498			1,885
Unamortized debt issuance costs, net of premium, and discount	(39		)	(11		)
Unsecured senior notes, net	$	2,459		$	1,874

⁽¹⁾

On July 13, 2018, Merger Sub issued $950 aggregate principal amount of the 8.125% Notes due 2023 and $750 aggregate principal amount of the 9.125% Notes due 2026. The proceeds from the New Notes were used, together with the proceeds from the issuance of WMIH’s common stock and WMIH’s cash and restricted cash on hand, to consummate the Merger with Nationstar and the refinancing of certain Nationstar’s existing debt and to pay related fees and expenses. At the consummation of the acquisition, Merger Sub merged with and into Nationstar with Nationstar assuming the obligations under the New Notes.


⁽²⁾	In June 2018, the Predecessor entered into a supplemental indenture to, among other things, modify the definition of “Change of Control” to provide that the Merger will not constitute a change of control which would otherwise trigger redemption obligations.


⁽³⁾	The note of the Predecessor was paid off or redeemed in August 2018.

The indentures for the unsecured senior notes contain various covenants and restrictions that limit the issuer(s) and restricted subsidiaries ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets or enter into certain transactions with affiliates. The indentures contain certain events of default, including (subject, in some cases, to customary cure periods and materiality thresholds) defaults based on (i) the failure to make payments under the applicable indenture when due, (ii) breach of covenants, (iii) cross-defaults to certain other indebtedness, (iv) certain bankruptcy or insolvency events, (v) material judgments and (vi) invalidity of material guarantees.

The indentures for the unsecured senior notes provide that the Company may redeem all or a portion of the notes prior to certain fixed dates by paying a make-whole premium plus accrued and unpaid interest, to the redemption dates. In addition, the Company may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest, to the redemption dates. During the five months ended December 31, 2018, the Company redeemed $658 in principal of outstanding notes. Additionally, the Company repaid $364 in principal of outstanding notes which matured during the five months ended December 31, 2018. The Predecessor repurchased $60 and $120 in principal amount of outstanding notes during the seven months ended July 31, 2018 and year ended December 31, 2017, respectively, resulting in a loss of $2 and $3, respectively.

Additionally, the indentures provide that on or before certain fixed dates, the Company may redeem (x) in the case of the New Notes, up to 40%, or (y) in the case of the other series of unsecured senior notes, up to 35% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest, to the redemption dates, subject to compliance with certain conditions.

The ratios included in the indentures for the unsecured senior notes are incurrence-based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio.

As of December 31, 2018, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:



Year Ending December 31,	Amount
2019	$	—
2020	—
2021	592
2022	206
2023	950
Thereafter	750
Total	$	2,498

Other Nonrecourse Debt

Other nonrecourse debt consists of the following:



						Successor		Predecessor
						December 31, 2018		December 31, 2017
	Issue Date	Maturity Date	Class of Note	Securitized Amount		Outstanding		Outstanding
Participating interest financing⁽¹⁾	—	—	—	$	—	$	5,607	$	7,111
Securitization of nonperforming HECM loans
Trust 2016-2	June 2016	June 2026	A, M1, M2	—		—		94
Trust 2016-3	August 2016	August 2026	A, M1, M2	—		—		138
Trust 2017-1	May 2017	May 2027	A, M1, M2	—		—		213
Trust 2017-2	September 2017	September 2027	A, M1, M2	284		231		365
Trust 2018-1	March 2018	March 2028	A, M1, M2, M3, M4, M5	308		284		—
Trust 2018-2	August 2018	August 2028	A, M1, M2, M3, M4, M5	260		250		—
Trust 2018-3	November 2018	November 2028	A, M1, M2, M3, M4, M5	350		326		—
Nonrecourse debt - legacy assets	November 2009	October 2039	A	105		29		42
Other nonrecourse debt principal amount						6,727		7,963
Unamortized debt issuance costs, net of premium, and issuance discount⁽²⁾						68		51
Other nonrecourse debt, net						$	6,795	$	8,014


⁽¹⁾	Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios.


⁽²⁾	The Predecessor amount includes a premium of $62 as of December 31, 2017.

Participating Interest Financing

Participating interest financing represents the obligation of HMBS pools to third-party security holders. The Company and Predecessor issue HMBS in connection with the securitization of borrower draws and accrued interest on HECM loans. Proceeds are received in exchange for securitized advances on the HECM loan amounts transferred to GNMA, and the Company retains a beneficial interest (referred to as a “participating interest”) in the securitization trust in which the HECM loans and HMBS obligations are held and assume both issuer and servicer responsibilities in accordance with GNMA HMBS program guidelines. Monthly cash flows generated from the HECM loans are used to service the HMBS obligations. The interest rate is based on the underlying HMBS rate with a range of 2.6% to 6.6%.

Securitizations of Nonperforming HECM Loans

From time to time, the Company securitizes its interests in non-performing reverse mortgages. The transactions provide investors with the ability to invest in a pool of both non-performing HECM loans secured by one-to-four-family residential properties and a pool of REO properties acquired through foreclosure of a deed in lieu of foreclosure in connection with HECM loans that are covered by FHA insurance. The transactions provide the Company with access to liquidity for the non-performing HECM loan portfolio, ongoing servicing fees, and potential residual returns. The transactions are structured as secured borrowings with the reverse mortgage loans included in the consolidated financial statements as reverse mortgage interests and the related financing included in other nonrecourse debt. Interest is accrued at a rate of 2.0% to 6.0% on the outstanding securitized notes and recorded as interest expense in consolidated statements of operations. The HECM securitizations are callable with expected weighted average lives of less than one to four years. The Company may re-securitize the previously called loans from earlier HECM securitizations to achieve a lower cost of funds.

Nonrecourse Debt – Legacy Assets

During November 2009, the Company completed the securitization of approximately $222 of Asset-Backed Securities (“ABS”), which was accounted for as a secured borrowing. This structure resulted in the Company carrying the securitized mortgage loans in its consolidated balance sheets and recognizing the asset-backed certificates acquired by third parties. The principal and interest on these notes are paid using the cash flows from the underlying mortgage loans, which serve as collateral for the debt. The interest rate paid on the outstanding securities is 7.5%, which is subject to an available funds cap. The total outstanding principal balance on the underlying mortgage loans serving as collateral for the debt was approximately $160 and $181 at December 31, 2018 and December 31, 2017, respectively. The UPB on the outstanding loans was $29 and $42 at December 31, 2018 and December 31, 2017, respectively, and the carrying value of the nonrecourse debt was $29 and $37, respectively.

Financial Covenants

The Company and the Predecessor’s borrowing arrangements and credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements. Due to the Merger-related expenses incurred by the Predecessor in July 2018, the Company was unable to meet the profitability requirement in one of its outstanding warehouse facilities as of September 30, 2018. At the Company’s request, the financial institution associated with this warehouse facility agreed to amend this profitability requirement. As a result of this amendment, the Company was in compliance with its required financial covenants as of December 31, 2018.

The Company is required to maintain a minimum tangible net worth of at least $682 as of each quarter-end related to its outstanding Master Repurchase Agreements on its outstanding repurchase facilities. As of December 31, 2018, the Company was in compliance with these minimum tangible net worth requirements.