6. SECURED DEBT AGREEMENTS, NET

Our secured debt agreements include credit facilities, the GE portfolio acquisition facility, asset-specific financings, and a revolving credit agreement. The following table details our secured debt agreements ($ in thousands):


	Secured Debt Agreements Borrowings Outstanding
	December 31, 2017			December 31, 2016
Credit facilities	$	4,068,249		$	3,572,837
GE portfolio acquisition facility		703,423			1,479,582
Asset-specific financings		518,864			679,207
Revolving credit agreement		—			—

Total secured debt agreements	$	5,290,536		$	5,731,626

Deferred financing costs⁽¹⁾		(16,681	)		(15,272	)

Net book value of secured debt	$	5,273,855		$	5,716,354

(1)

Costs incurred in connection with our secured debt agreements are recorded on our consolidated balance sheet when incurred and recognized as a component of interest expense over the life of each related agreement.

Credit Facilities

During the year ended December 31, 2017, we (i) added two new credit facilities related to our Multifamily Joint Venture, providing an aggregate additional $450.0 million of credit capacity, (ii) increased the maximum facility size of two of our existing credit facilities, providing an additional £250.0 million and €250.0 million of credit capacity, respectively, and (iii) converted one of our asset-specific financings to a $500.0 million credit facility. The following tables detail our credit facilities ($ in thousands):


	December 31, 2017
	Maximum Facility Size⁽¹⁾		Collateral Assets⁽²⁾		Credit Borrowings
Lender	Maximum Facility Size⁽¹⁾		Collateral Assets⁽²⁾		Potential⁽³⁾		Outstanding		Available⁽³⁾
Wells Fargo	$	2,000,000	$	1,680,325	$	1,289,135	$	1,170,801	$	118,334
MetLife		1,000,000		1,039,231		807,164		807,164		—
Bank of America		750,000		765,049		573,542		573,542		—
JP Morgan⁽⁴⁾		500,000		579,218		443,496		319,755		123,741
Société Générale⁽⁵⁾		480,200		373,181		300,871		300,871		—
Deutsche Bank		500,000		399,203		295,743		295,743		—
Citibank⁽⁶⁾		800,125		455,433		354,354		240,881		113,473
Morgan Stanley⁽⁷⁾		675,650		591,168		456,344		216,044		240,300
Bank of America - Multi. JV⁽⁸⁾		200,000		106,950		85,560		85,560		—
Goldman Sachs - Multi. JV⁽⁸⁾		250,000		75,225		57,888		57,888		—

	$	7,155,975	$	6,064,983	$	4,664,097	$	4,068,249	$	595,848


	December 31, 2016
	Maximum Facility Size⁽¹⁾		Collateral Assets⁽²⁾		Credit Borrowings
Lender	Maximum Facility Size⁽¹⁾		Collateral Assets⁽²⁾		Potential⁽³⁾		Outstanding		Available⁽³⁾
Wells Fargo	$	2,000,000	$	1,718,874	$	1,339,942	$	1,107,733	$	232,209
MetLife		1,000,000		1,106,017		862,454		862,454		—
Bank of America		750,000		794,881		617,694		617,694		—
JP Morgan⁽⁴⁾		500,000		550,560		420,414		316,219		104,195
Morgan Stanley⁽⁷⁾		308,500		344,056		272,221		231,930		40,291
Citibank⁽⁶⁾		500,000		508,989		394,677		229,629		165,048
Société Générale⁽⁵⁾		420,680		274,351		207,178		207,178		—

	$	5,479,180	$	5,297,728	$	4,114,580	$	3,572,837	$	541,743

(1)	Maximum facility size represents the largest amount of borrowings available under a given facility once sufficient collateral assets have been approved by the lender and pledged by us.

(2)	Represents the principal balance of the collateral assets.

(3)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.

(4)	As of December 31, 2017 and December 31, 2016, the JP Morgan maximum facility size was composed of a general $500.0 million facility size, under which U.S. Dollars and British Pounds Sterling borrowings are contemplated.

(5)

As of December 31, 2017 and December 31, 2016, the Société Générale maximum facility size was composed of a €400.0 million facility size, which translated to $480.2 million and $420.7 million, respectively. Borrowings denominated in U.S. Dollars, British Pounds Sterling, and Euros are contemplated under this facility.

(6)

As of December 31, 2017, the Citibank maximum facility size was composed of a $500.0 million facility denominated in U.S. Dollars plus a €250.0 million facility, which translated to $300.1 million as of such date, which contemplated borrowings denominated in British Pounds Sterling and Euros. As of December 31, 2016, the maximum facility size was composed of a general $500.0 million facility.

(7)

As of December 31, 2017, the Morgan Stanley maximum facility size was composed of a £500.0 million facility size, which translated to $675.7 million as of such date. As of December 31, 2016, the maximum facility size was composed of a £250.0 million facility size, which translated to $308.5 million as of such date. Borrowings denominated in U.S. Dollars, British Pounds Sterling, and Euros are contemplated under this facility.

(8)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 to our consolidated financial statements for additional discussion of our Multifamily Joint Venture.

The weighted-average outstanding balance of our credit facilities was $4.1 billion for the year ended December 31, 2017. As of December 31, 2017, we had aggregate borrowings of $4.1 billion outstanding under our credit facilities, with a weighted-average cash coupon of LIBOR plus 1.90% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.12% per annum, and a weighted-average advance rate of 78.7%. As of December 31, 2017, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.5 years.

The weighted-average outstanding balance of our credit facilities was $3.0 billion for the year ended December 31, 2016. As of December 31, 2016, we had aggregated borrowings of $3.6 billion outstanding under our credit facilities, with a weighted-average cash coupon of LIBOR plus 1.82% per annum, a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 2.02% per annum, and a weighted-average advance rate of 79.1%. As of December 31, 2016, outstanding borrowings under these facilities had a weighted-average maturity, excluding extension options and term-out provisions, of 1.5 years.

Borrowings under each facility are subject to the initial approval of eligible collateral loans by the lender and the maximum advance rate and pricing rate of individual advances are determined with reference to the attributes of the respective collateral loan.

The following tables outline the key terms of our credit facilities as of December 31, 2017:


Lender	Currency		Guarantee⁽¹⁾			Margin Call⁽²⁾	Term/Maturity
Wells Fargo		$		25	%	Collateral marks only	Term matched⁽³⁾
MetLife		$		50	%	Collateral marks only	April 21, 2023⁽⁴⁾
Bank of America		$		50	%	Collateral marks only	May 21, 2021⁽⁵⁾
JP Morgan		$ / £		50	%	Collateral marks only	January 7, 2020
Société Générale		$ / £ / €		25	%	Collateral marks only	Term matched⁽³⁾
Deutsche Bank		$		35	%	Collateral marks only	Term matched⁽³⁾
Citibank		$ / £ / €		25	%	Collateral marks only	Term matched⁽³⁾
Morgan Stanley		$ / £ / €		25	%	Collateral marks only	March 3, 2020
Bank of America - Multi. JV⁽⁶⁾	$			43	%	Collateral marks only	July 19, 2021
Goldman Sachs - Multi. JV⁽⁶⁾	$			25	%	Collateral marks only	July 12, 2020

(1)	Other than amounts guaranteed based on specific collateral asset types, borrowings under our credit facilities are non-recourse to us.

(2)	Margin call provisions under our credit facilities do not permit valuation adjustments based on capital markets events, and are limited to collateral-specific credit marks.

(3)	These credit facilities have various availability periods during which new advances can be made and which are generally subject to each lender’s discretion. Maturity dates for advances outstanding are tied to the term of each respective collateral asset.

(4)	Includes five one-year extension options which may be exercised at our sole discretion.

(5)	Includes two one-year extension options which may be exercised at our sole discretion.

(6)	These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.


Currency	Outstanding Borrowings		Potential Borrowings⁽¹⁾		Index	Rate⁽²⁾	Advance Rate⁽³⁾
$	$	3,798,619	$	4,275,789	1-month USD LIBOR	L+1.87%	78.6%
€	€	66,144	€	87,744	3-month EURIBOR	L+2.24%	80.0%
£	£	140,771	£	209,406	3-month GBP LIBOR	L+2.24%	78.6%

	$	4,068,249	$	4,664,097		L+1.90%	78.7%

(1)	Potential borrowings represents the total amount we could draw under each facility based on collateral already approved and pledged. When undrawn, these amounts are immediately available to us at our sole discretion under the terms of each credit facility.

(2)	Represents weighted-average cash coupon based on borrowings outstanding.

(3)	Represents weighted-average advance rate based on the outstanding principal balance of the collateral assets pledged.

GE Portfolio Acquisition Facility

During the second quarter of 2015, concurrently with our acquisition of the GE portfolio, we entered into an agreement with Wells Fargo to provide us with secured financing for the acquired portfolio. As of December 31, 2017, this facility provided for $816.3 million of financing, of which $703.4 million was outstanding and an additional $112.9 million was available to finance future loan fundings in the GE portfolio. The GE portfolio acquisition facility is non-revolving and consists of a single master repurchase agreement providing for asset-specific borrowings for each collateral asset.

The asset-specific borrowings under the GE portfolio acquisition facility were advanced at a weighted-average rate of 80% of our purchase price of the collateral assets and are repaid pro rata from collateral asset repayment proceeds. The asset-specific borrowings are currency matched to the collateral assets and accrue interest at a rate equal to the sum of (i) the applicable base rate plus (ii) a margin of 1.75%, which will increase to 1.80% and 1.85% in year four and year five, respectively. As of December 31, 2017, those borrowings were denominated in U.S. Dollars and Canadian Dollars. The asset-specific borrowings are term matched to the underlying collateral assets with an outside maturity date of May 20, 2020, which may be extended pursuant to two one-year extension options. We guarantee obligations under the GE portfolio acquisition facility in an amount equal to the greater of (i) 25% of outstanding asset-specific borrowings, and (ii) $250.0 million. We had outstanding asset-specific borrowings under the GE portfolio acquisition facility of $703.4 million and a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.72% per annum as of December 31, 2017, compared to $1.5 billion of outstanding asset-specific borrowings and a weighted-average all-in cost of credit, including associated fees and expenses, of LIBOR plus 1.83% per annum as of December 31, 2016.

Asset-Specific Financings

The following tables detail our asset-specific financings ($ in thousands):


	December 31, 2017
Asset-Specific Financings	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost⁽¹⁾			Guarantee⁽²⁾		Wtd. Avg. Term⁽³⁾
Collateral assets		6	$	682,259	$	677,296		L+4.76	%		n/a		Dec. 2020
Financing provided⁽⁴⁾		6	$	518,864	$	517,088		L+2.50	%	$	162,475		Dec. 2020

(1)

These floating rate loans and related liabilities are indexed to the various benchmark rates relevant in each arrangement in terms of currency and payment frequency. Therefore the net exposure to each benchmark rate is in direct proportion to our net assets indexed to that rate. In addition to cash coupon, yield/cost includes the amortization of deferred origination fees / financing costs.

(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.

(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.

(4)	Borrowings of $394.8 million under these asset specific financings are cross collateralized with related credit facilities with the same lenders.


	December 31, 2016
Asset-Specific Financings	Count		Principal Balance		Book Value		Wtd. Avg. Yield/Cost⁽¹⁾			Guarantee⁽²⁾		Wtd. Avg. Term⁽³⁾
Collateral assets		7	$	876,083	$	869,417		L+4.84	%		n/a		Aug. 2020
Financing provided⁽⁴⁾		7	$	679,207	$	676,333		L+2.60	%	$	231,585		Aug. 2020

(1)

(2)	Other than amounts guaranteed on an asset-by-asset basis, borrowings under our asset-specific financings are non-recourse to us.

(3)	The weighted-average term is determined based on the maximum maturity of the corresponding loans, assuming all extension options are exercised by the borrower. Each of our asset-specific financings are term-matched to the corresponding collateral loans.

(4)	Borrowings of $392.3 million under these asset specific financings are cross collateralized with related credit facilities with the same lenders.

The weighted-average outstanding balance of our asset-specific financings was $576.4 million for the year ended December 31, 2017 and $584.7 million for the year ended December 31, 2016.

Revolving Credit Agreement

During the second quarter of 2017, we increased the borrowing capacity under our secured revolving credit agreement with Barclays by $125.0 million to $250.0 million. This full recourse facility is designed to finance first mortgage originations for up to six months as a bridge to term financing or syndication. Advances under the agreement are subject to availability under a specified borrowing base and accrue interest at a per annum pricing rate equal to the sum of (i) an applicable base rate or Eurodollar rate and (ii) an applicable margin, in each case, dependent on the applicable type of loan collateral. The maturity date of the facility is April 4, 2020.

During the year ended December 31, 2017, the weighted-average outstanding borrowings under the revolving credit agreement were $30.7 million and we recorded interest expense of $3.0 million, including $829,000 of amortization of deferred fees and expenses. As of December 31, 2017, we had no outstanding borrowings under the agreement.

During the year ended December 31, 2016, the weighted-average outstanding borrowings under the revolving credit agreement were $31.6 million and we recorded interest expense of $1.4 million, including $376,000 of amortization of deferred fees and expenses. As of December 31, 2016 we had no outstanding borrowings under the agreement.

Debt Covenants

Each of the guarantees related to our secured debt agreements contain the following uniform financial covenants: (i) our ratio of earnings before interest, taxes, depreciation, and amortization, or EBITDA, to fixed charges, as defined in the agreements, shall be not less than 1.4 to 1.0; (ii) our tangible net worth, as defined in the agreements, shall not be less than $2.2 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to December 31, 2017; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 83.33% of our total assets. As of December 31, 2017 and December 31, 2016, we were in compliance with these covenants.