Borrowings

Secured Borrowings

The Company's secured borrowings consist of reverse repurchase agreements, Other secured borrowings, and Other secured borrowings, at fair value. As of December 31, 2017 and 2016, the Company's total secured borrowings were $1.392 billion and $1.058 billion, respectively.

Reverse Repurchase Agreements

The Company enters into reverse repurchase agreements. A reverse repurchase agreement involves the sale of an asset to a counterparty together with a simultaneous agreement to repurchase the transferred asset or similar asset from such counterparty at a future date. The Company accounts for its reverse repurchase agreements as collateralized borrowings, with the transferred assets effectively serving as collateral for the related borrowing. The Company's reverse repurchase agreements typically range in term from 30 to 180 days, although the Company also has reverse repurchase agreements that provide for longer or shorter terms. The principal economic terms of each reverse repurchase agreement—such as loan amount, interest rate, and maturity date—are typically negotiated on a transaction-by-transaction basis. Other terms and conditions, such as those relating to events of default, are typically governed under the Company's master repurchase agreements. Absent an event of default, the Company maintains beneficial ownership of the transferred securities during the term of the reverse repurchase agreement and receives the related principal and interest payments. Interest rates on these borrowings are generally fixed based on prevailing rates corresponding to the terms of the borrowings, and for most reverse repurchase agreements, interest is generally paid at the termination of the reverse repurchase agreement, at which time the Company may enter into a new reverse repurchase agreement at prevailing market rates with the same counterparty, repay that counterparty and possibly negotiate financing terms with a different counterparty, or choose to no longer finance the related asset. Some reverse repurchase agreements provide for periodic payments of interest, such as monthly payments. In response to a decline in the fair value of the transferred securities, whether as a result of changes in market conditions, security paydowns, or other factors, reverse repurchase agreement counterparties will typically make a margin call, whereby the Company will be required to post additional securities and/or cash as collateral with the counterparty in order to re-establish the agreed-upon collateralization requirements. In the event of increases in fair value of the transferred securities, the Company can generally require the counterparty to post collateral with it in the form of cash or securities. The Company is generally permitted to sell or re-pledge any securities posted by the counterparty as collateral; however, upon termination of the reverse repurchase agreement, or other circumstance in which the counterparty is no longer required to post such margin, the Company must return to the counterparty the same security that had been posted.

At any given time, the Company seeks to have its outstanding borrowings under reverse repurchase agreements with several different counterparties in order to reduce the exposure to any single counterparty. The Company had outstanding borrowings under reverse repurchase agreements with twenty-three and twenty-one counterparties as of December 31, 2017 and 2016, respectively.

At December 31, 2017, approximately 19% of open reverse repurchase agreements were with one counterparty. As of December 31, 2016, there was no counterparty that held 15% or more of the Company's outstanding reverse repurchase agreements. As of December 31, 2017 remaining days to maturity on the Company's open reverse repurchase agreements ranged from 2 days to 1094 days and from 3 days to 320 days as of December 31, 2016. Interest rates on the Company's open reverse repurchase agreements ranged from (1.25)% to 4.94% as of December 31, 2017 and from 0.60% to 3.76% as of December 31, 2016.

The following table details the Company's outstanding borrowings under reverse repurchase agreements for Agency RMBS, Credit assets (which include non-Agency MBS, CLOs, consumer loans, corporate debt, residential mortgage loans, and commercial mortgage loans and REO), and U.S. Treasury securities, by remaining maturity as of December 31, 2017 and 2016:



(In thousands)	December 31, 2017					December 31, 2016
			Weighted Average					Weighted Average
Remaining Maturity	Outstanding Borrowings		Interest Rate		Remaining Days to Maturity	Outstanding Borrowings		Interest Rate		Remaining Days to Maturity
Agency RMBS:
30 Days or Less	$	287,014	1.43	%	15	$	405,725	0.83	%	18
31-60 Days	264,058		1.47	%	46	195,288		0.94	%	45
61-90 Days	277,950		1.63	%	74	149,965		0.97	%	74
91-120 Days	—		—	%	—	8,240		0.83	%	102
121-150 Days	—		—	%	—	11,798		0.96	%	131
151-180 Days	602		2.56	%	158	19,296		1.05	%	164
Total Agency RMBS	829,624		1.51	%	44	790,312		0.89	%	41
Credit:
30 Days or Less	37,433		2.61	%	13	94,849		2.55	%	16
31-60 Days	132,201		2.44	%	49	26,974		2.36	%	47
61-90 Days	130,875		2.75	%	77	41,522		2.43	%	77
91-120 Days	—		—	%	—	10,084		2.91	%	97
121-150 Days	8,551		3.79	%	128	1,239		2.73	%	124
151-180 Days	8,300		3.40	%	164	12,616		3.17	%	165
181-360 Days	5,090		3.59	%	280	50,557		3.46	%	316
> 360 Days	56,944		4.94	%	1094	—		—	%	—
Total Credit Assets	379,394		3.00	%	219	237,841		2.75	%	105
U.S. Treasury Securities:
30 Days or Less	297		1.70	%	2	5,428		0.91	%	4
Total U.S. Treasury Securities	297		1.70	%	2	5,428		0.91	%	4
Total	$	1,209,315	1.98	%	99	$	1,033,581	1.32	%	56

Reverse repurchase agreements involving underlying investments that the Company sold prior to period end, for settlement following period end, are shown using their original maturity dates even though such reverse repurchase agreements may be expected to be terminated early upon settlement of the sale of the underlying investment.

As of December 31, 2017 and 2016, the fair value of investments transferred as collateral under outstanding borrowings under reverse repurchase agreements was $1.41 billion and $1.15 billion, respectively. Collateral transferred under outstanding borrowings as of December 31, 2017 include investments in the amount of $10.6 million that were sold prior to period end but for which such sale had not yet settled. In addition the Company posted net cash collateral of $18.6 million and additional securities with a fair value of $1.3 million as of December 31, 2017 to its counterparties. Collateral transferred under outstanding borrowings as of December 31, 2016 include investments in the amount of $33.4 million that were sold prior to year end but for which such sale had not yet settled. In addition, the Company posted net cash collateral of $39.2 million and additional securities with a fair value of $2.7 million as of December 31, 2016 as a result of margin calls from various counterparties.

As of December 31, 2017 and 2016 there were no counterparties for which the amount at risk relating to our repurchase agreements was greater than 10% of total equity.

Other Secured Borrowings

The Company was a party to various securitization transactions, which were accounted for as collateralized borrowings, to finance certain of its commercial mortgage loans and REO. As of December 31, 2016, the Company had outstanding borrowings in the amount of $24.1 million in connection with one such securitization, which is included under the caption Other secured borrowings on the Company's Consolidated Statement of Assets, Liabilities, and Equity. As of December 31, 2016, the fair value of commercial mortgage loans and REO collateralizing this borrowing was $42.0 million. This securitization was terminated in December 2017, upon which the Company immediately entered into a reverse repurchase agreement with the same counterparty to finance certain of its commercial mortgage loans and REO. See Note 9, Related Party Transactions, for further information on the Company's secured borrowings.

In December 2017, the Company amended its non-recourse secured borrowing facility that is used to finance a portfolio of unsecured loans. The facility includes a reinvestment period ending in December 2019 (or earlier following an early amortization event), whereby the Company can vary its borrowings based on the size of its portfolio, subject to certain maximum limits. Following the reinvestment period, the facility will begin to amortize based on the collections from the underlying loans. The facility accrues interest on a floating rate basis. As of December 31, 2017, the Company had outstanding borrowings under this facility in the amount of $57.9 million which is included under the caption Other secured borrowings, on the Company's Consolidated Statement of Assets, Liabilities, and Equity and the effective interest rate on this facility, inclusive of related deferred financing costs, was 4.34% as of December 31, 2017. As of December 31, 2017, the fair value of unsecured loans collateralizing this borrowing was $89.7 million.

In November 2017, the Company completed a securitization transaction, as discussed in Note 6, whereby it financed a portfolio of non-QM loans. As of December 31, 2017 the fair value of the Company’s outstanding liability associated with this securitization transaction was $125.1 million, representing the fair value of the securitization trust certificates held by third parties as of such date, and is included on Company's Consolidated Statement of Assets, Liabilities, and Equity in Other Secured Borrowings, at fair value. The weighted average coupon on the Certificates held by third parties was 2.89% as of December 31, 2017. As of December 31, 2017, the fair value of non-QM loans held in the securitization trust was $132.4 million.

Unsecured Borrowings

Senior Notes

On August 18, 2017, the Company issued $86.0 million in aggregate principal amount of Senior Notes. The total net proceeds to the Company from the issuance of the Senior Notes was approximately $84.7 million, after deducting debt issuance costs. The Senior Notes bear an interest rate of 5.25%, subject to adjustment based on changes in the ratings, if any, of the Senior Notes. Interest on the Senior notes is payable semi-annually in arrears on March 1 and September 1 of each year, with the first interest payment date on March 1, 2018. The Senior Notes mature on September 1, 2022. The Company may redeem the Senior Notes, at its option, in whole or in part, prior to March 1, 2022 at a price equal to 100% of the principal amount thereof, plus the applicable "make-whole" premium as of the applicable date of redemption. At any time on or after March 1, 2022, the Company may redeem the Senior Notes, in whole or in part, at a redemption price equal to 100% of the aggregate principal amount of the Senior Notes to be redeemed, plus accrued and unpaid interest. The Senior Notes are carried at amortized cost. There are a number of covenants, including several financial covenants, associated with the Senior Notes. As of December 31, 2017 the Company was in compliance with all of its covenants.

The Company amortizes debt issuance costs over the life of the associated debt; the amortized portion of debt issuance costs is included in Interest expense on the Consolidated Statement of Operations. The Senior Notes have an effective interest rate of 5.55%, inclusive of debt issuance costs.

The Senior Notes are unsecured and are effectively subordinated to secured indebtedness of the Company, to the extent of the value of the collateral securing such indebtedness.

Schedule of Principal Repayments

The following table details the Company's principal repayment schedule for outstanding borrowings as of December 31, 2017:



Year	Reverse Repurchase Agreements⁽¹⁾		Other Secured Borrowings⁽²⁾		Senior Notes⁽¹⁾		Total
2018	1,152,371		42,409		—		1,194,780
2019	—		140,608		—		140,608
2020	56,944		—		—		56,944
2021	—		—		—		—
2022	—		—		86,000		86,000
Total	$	1,209,315	$	183,017	$	86,000	$	1,478,332


(1)	Reflects the Company's contractual principal repayment dates.


(2)	Reflects the Company's expected principal repayment dates.