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Secured Debt Agreements, Net
 12 Months Ended
Dec. 31, 2019
Debt Disclosure [Abstract]  
Secured Debt Agreements, Net
5. SECURED DEBT AGREEMENTS, NET
Our secured debt agreements include secured credit facilities, 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, 2019
 
  
December 31, 2018
 
Secured credit facilities
  $
9,753,059
     $
8,870,897
  
Asset-specific financings
   
330,879
     
81,739
 
Revolving credit agreement
   
—  
      
43,845
 
                 
Total secured debt agreements
  $
             
10,083,938
    $             
8,996,481
 
                 
Deferred financing costs
(1)
    
(29,008
 )    
(21,725
 )
                 
Net book value of secured debt
  $
10,054,930
    $
8,974,756
 
                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  (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.  
 
 
 
 
 
 
 
 
 
 
 
Secured Credit Facilities
During the year ended December 31, 2019, we increased the size of six of our existing credit facilities, providing an aggregate additional $2.9 billion of credit capacity, and added two new credit facilities, providing an aggregate additional
$577.0 million of credit capacity
.
 
The following tables detail our secured credit facilities ($ in thousands):
                                         
 
December 31, 2019
 
 
Credit Facility Borrowings
 
 
 
 
 
 
 
 
 
Collateral
Assets
(2)
 
Lender
 
Potential
(1)
 
  
Outstanding
 
  
Available
(1)
 
  
Wells Fargo
  $
       2,056,769
    $
       2,018,057
    $
       38,712
   
  $
    2,621,806
 
Deutsche Bank
   
2,037,795
     
1,971,860
     
65,935
   
   
2,573,447
 
Barclays
   
1,629,551
     
1,442,083
     
187,468
   
   
2,044,654
 
Citibank
   
1,159,888
     
1,109,837
     
50,051
   
   
1,473,745
 
Bank of America
   
603,660
     
513,660
     
90,000
   
   
775,678
 
Morgan Stanley
 
 
 
 
524,162
 
 
 
 
468,048
 
 
 
 
56,114
 
 
 
 
 
706,080
 
Goldman Sachs
 
 
 
 
474,338
 
 
 
 
450,000
 
 
 
 
24,338
 
 
 
 
 
632,013
 
MetLife
   
417,677
     
417,677
     
—  
    
   
536,553
 
Société Générale
   
333,473
     
333,473
     
—  
    
   
437,130
 
US Bank - Multi. JV
(3)
    
279,838
     
279,552
     
286
   
   
350,034
 
JP Morgan
 
 
 
303,288
 
 
 
 
259,062
 
 
 
 
44,226
 
 
 
 
386,545
 
Santander
   
239,332
     
239,332
     
—  
    
   
299,597
 
Goldman Sachs - Multi. JV
(3)
 
 
 
 
203,846
 
 
 
 
203,846
 
 
 
 —
 
 
 
 
 
 
 
261,461
 
Bank of America - Multi. JV
(3)
    
46,572
     
46,572
     
—  
    
   
58,957
 
  $
    
10,310,189
    $
       
9,753,059
    $
     
557,130
   
  $
    
13,157,700
 
                                     
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 the principal balance of the collateral assets.
 
 
 
(3)
These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The weighted-average outstanding balance of our secured credit facilities was $8.8 billion for the year ended December 31, 2019. As of December 31, 2019, we had aggregate borrowings of $9.8 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.60% per annum, a weighted-average
all-in
cost of credit, including associated fees and expenses, of LIBOR plus 1.79% per annum, and a weighted-average advance rate of 79.4%. As of December 31, 2019, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.6 years.
                                         
 
December 31, 2018
 
 
Credit Facility Borrowings
   
 
  
Collateral
Assets
(2)
 
Lender
 
Potential
(1)
 
  
Outstanding
 
  
Available
(1)
 
  
 
Deutsche Bank
  $
       
1,839,698
    $
       
1,839,698
    $
—  
      
    $
2,325,047
 
Wells Fargo
   
1,908,509
     
1,822,154
     
86,355
     
     
2,514,513
 
JP Morgan
   
1,010,628
     
1,010,628
     
—  
      
     
1,266,259
 
Barclays
   
890,620
     
890,620
     
—  
      
     
1,113,275
 
Citibank
   
852,470
     
663,917
     
188,553
     
     
1,076,085
 
Bank of America
   
873,446
     
873,446
     
—  
      
     
1,090,117
 
MetLife
   
675,329
     
675,329
     
—  
      
     
852,733
 
Morgan Stanley
   
341,241
     
276,721
     
64,520
     
     
457,496
 
Société Générale
   
321,182
     
321,182
     
—  
      
     
404,048
 
Goldman Sachs
   
230,140
     
230,140
     
—  
      
     
295,368
 
Goldman Sachs - Multi. JV
(3)
    
170,060
     
170,060
     
—  
      
     
212,983
 
Bank of America - Multi. JV
(3)
    
97,002
     
97,002
     
—  
      
     
121,636
 
                                         
  $
9,210,325
    $
8,870,897
    $
       
339,428
     
    $
       
11,729,560
 
                                         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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 the principal balance of the collateral assets.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3)
These facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.
 
 
 
 
 
 
 
 
 
 
 
The weighted-average outstanding balance of our secured credit facilities was $6.5 billion for the year ended December 31, 2018. As of December 31, 2018, we had aggregate borrowings of $8.9 billion outstanding under our secured credit facilities, with a weighted-average cash coupon of LIBOR plus 1.72% per annum, a weighted-average
all-in
cost of credit, including associated fees and expenses, of LIBOR plus 1.90% per annum, and a weighted-average advance rate of 79.5%. As of December 31, 2018, outstanding borrowings under these facilities had a weighted-average maturity, including extension options, of 3.5 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, 2019:
Lender
 
Currency
 
 
Guarantee
(1)
 
 
Margin Call
(2)
 
 
Term/Maturity
 
Morgan Stanley
 
 
$ / £ / 
€
 
 
 
25
%
 
 
Collateral marks only
 
 
 
March 1, 2022
 
Goldman Sachs - Multi. JV
(3)
 
 
$
 
 
 
25
%
 
 
Collateral marks only
 
 
 
July 12, 2022
(6)
 
Bank of America - Multi. JV
(3)
 
 
$
 
 
 
43
%
 
 
Collateral marks only
 
 
 
July 19, 2023
(7)
 
Goldman Sachs
 
 
$
 
 
 
25
%
 
 
Collateral marks only
 
 
 
October 22, 2023
(8)
 
JP Morgan
 
 
$ / £
 
 
 
50
%
 
 
Collateral marks only
 
 
 
January 7, 2024
(9)
 
Bank of America
 
 
$
 
 
 
50
%
 
 
Collateral marks only
 
 
 
May 21, 2024
(10)
 
Barclays
 
 
$ / £ / 
€
 
 
 
25
%
 
 
Collateral marks only
 
 
 
June 18, 2024
(11)
 
MetLife
 
 
$
 
 
 
61
%
 
 
Collateral marks only
 
 
 
September 23, 2025
(12)
 
Deutsche Bank
 
 
$ / 
€
 
 
 
59
%
(4)
 
 
Collateral marks only
 
 
 
Term matched
(13)
 
Citibank
 
 
$ / £ / 
€
 / A$ / C$
 
 
 
25
%
 
 
Collateral marks only
 
 
 
Term matched
(13)
 
Société Générale
 
 
$ / £ / 
€
 
 
 
25
%
 
 
Collateral marks only
 
 
 
Term matched
(13)
 
Santander
 
 
€
 
 
 
50
%
 
 
Collateral marks only
 
 
 
Term matched
(13)
 
Wells Fargo
 
 
$ / C$
 
 
 
25
%
(5)
 
 
Collateral marks only
 
 
 
Term matched
(13)
 
US Bank - Multi. JV
(3)
 
 
$
 
 
 
25
%
 
 
Collateral marks only
 
 
 
Term matched
(13)
 
 
 
(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 facilities finance the loan investments of our consolidated Multifamily Joint Venture. Refer to Note 2 for additional discussion of our Multifamily Joint Venture.
(4) Specific borrowings outstanding of $951.6 million are 100% guaranteed
.
 The remainder of the credit facility borrowings are 25% guaranteed.
(5) In addition to the 25% guarantee across all borrowings, there is an incremental guarantee of $148.3 million related to $197.7 million of specific borrowings outstanding.
(6) Includes
a
one-year
extension option which may be exercised at our sole discretion. 
(7) Includes two
one-year
extension
options which may be exercised at our sole discretion.
(8) Includes
two
one-year
extension option
s
which may be exercised at our sole discretion.
(9) Includes two
one-year
extension options which may be exercised at our sole discretion.
(10) Includes
two
one-year
extension options which may be exercised at our sole discretion.
(11)
Includes four
one-year
extension options which may be exercised at our sole discretion.
(12) Includes five
one-year
extension options which may be exercised at our sole discretion.
(13) These secured 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.
    Currency    
 
 
Potential
Borrowings
(1)
 
 
Outstanding
Borrowings
 
 
Floating Rate Index
(2)
 
 
Spread
 
 
Advance
Rate
(3)
 
 
$
 
 
$
6,710,218
 
 
$
6,186,958
 
 
 
        USD LIBOR        
 
 
 
L + 1.60%
 
 
 
79.6%
 
 
€
 
 
€
2,155,130
 
 
€
2,125,716
 
 
 
EURIBOR
 
 
 
E + 1.41%
 
 
 
80.0%
 
 
£
 
 
£
712,583
 
 
£
711,900
 
 
 
GBP LIBOR
 
 
 
L + 1.99%
 
 
 
77.4%
 
 
A$
 
 
A$
255,270
 
 
A$
255,270
 
 
 
BBSY
 
 
 
BBSY + 1.90%
 
 
 
78.0%
 
 
C$
 
 
C$
77,329
 
 
C$
77,349
 
 
 
CDOR
 
 
 
CDOR + 1.80%
 
 
 
78.4%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
10,310,189
 
 
$
9,753,059
 
 
 
 
 
 
INDEX + 1.60%
 
 
 
79.4%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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)
Floating rate indices are generally matched to the payment timing under the terms of each secured credit facility and its respective collateral assets.
(3)
Represents weighted-average advance rate based on the approved outstanding principal balance of the collateral assets pledged.
Asset-Specific Financings
The following tables detail our asset-specific financings ($ in thousands):
 
  
December 31, 2019
 
Asset-Specific Financings
 
Count
 
  
Principal
Balance
 
  
Book
Value
 
  
Wtd. Avg.
Yield/Cost
(1)
 
  
Guarantee
(2)
 
  
Wtd. Avg.
Term
(3)
 
Collateral assets
   
4
    $
     429,983
    $
     417,820
     
L+4.90
 %    
n/a
     
Mar. 2023
  
Financing provided
   
4
    $
330,879
    $
323,504
     
L+3.42
 %  
$
97,930
     
Mar. 2023
  
  
December 31, 2018
 
Asset-Specific Financings
 
Count
 
  
Principal
Balance
 
  
Book
Value
 
  
Wtd. Avg.
Yield/Cost
(1)
 
  
Guarantee
(2)
 
  
Wtd. Avg.
Term
(3)
 
Collateral assets
   
1
    $
     106,739
    $
     104,807
     
L+6.08
 %    
n/a
     
Aug. 2022
  
Financing provided
 
   
1
    $
81,739
    $
80,938
     
L+4.07
 %  
$
—
     
Aug. 2022
  
 
 
(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 is term-matched to the corresponding collateral loans.
The weighted-average outstanding balance of our asset-specific financings was $185.0 
million and
$52.8 million
for the years ended December 31, 2019 and 2018, respectively.
Revolving Credit Agreement
We have a $250.0 million full recourse secured revolving credit agreement with Barclays that is designed to finance first mortgage originations for up to nine 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, 2019, the weighted-average outstanding borrowings under the revolving credit agreement was $14.3 million and we recorded interest expense of $2.6 million, including $1.0
million
of amortization of deferred fees and expenses. As of December 31, 2019, we had no outstanding borrowings under the agreement.
During the year ended December 31, 2018, the weighted-average outstanding borrowings under the revolving credit agreement was $44.3 million and we recorded interest expense of $3.8 million, including $1.1 million of amortization of deferred fees and expenses. As of December 31, 2018, we had $43.8 million of borrowings outstanding under the agreement.
Debt Covenants
The guarantees related to our secured debt agreements contain the following 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 $2.8 billion as of each measurement date plus 75% of the net cash proceeds of future equity issuances subsequent to December 31, 2019; (iii) cash liquidity shall not be less than the greater of (x) $10.0 million or (y) no more than 5% of our recourse indebtedness; and (iv) our indebtedness shall not exceed 83.33% of our total assets. As of December 31, 2019 and December 31, 2018, we were in compliance with these covenants. Refer to Note 8 for information regarding financial covenants contained in the agreements governing our senior secured term loan facility.