SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2019

24. SUBSEQUENT EVENTS

In January 2020, the Company completed and closed its securitization of residential mortgage loans, OBX 2020-INV1 Trust, with a face value of $374.6 million. The securitization represented a financing transaction which provided non-recourse financing to the Company collateralized by residential mortgage loans purchased by the Company.

On February 12, 2020, the Company entered into an Internalization Agreement with the Manager and certain affiliates of the Manager. Pursuant to the Internalization Agreement, the Company agreed to acquire all of the outstanding equity interests of the Manager and the Manager’s direct and indirect parent companies from their respective owners (the “Internalization”) for nominal

cash consideration ($1.00). As a result of the Internalization, the Manager will cease to perform any outside management services for the Company and the Company will become an internally-managed REIT.

While Glenn A. Votek, the Company’s interim Chief Executive Officer and President, intends to transition to a temporary advisory role with the Company and to continue serving as an active member of the Board following the appointment of a permanent chief executive officer and president, the Company’s other executive officers have entered into employment agreements that will become effective upon the closing of the Internalization. In addition, the Management Agreement will be terminated at the closing of the Internalization, and the Manager has agreed to waive any Acceleration Fee (as defined in the Management Agreement) solely as related to the closing of the Internalization. If the closing does not occur, the Management Agreement will revert to the form it was in immediately prior to the execution of the Internalization Agreement in all respects, including with respect to the Acceleration Fee. The Company anticipates that the closing will occur in the second quarter of 2020.