Capstead pledges its Residential mortgage investments as collateral for secured borrowings primarily in the form of repurchase arrangements with commercial banks and other financial institutions (collectively referred to as “counterparties” or “lending counterparties”). Repurchase arrangements entered into by the Company involve the sale and a simultaneous agreement to repurchase the transferred assets at a future date and are accounted for as financings. The Company maintains the beneficial interest in the specific securities pledged during the term of each repurchase arrangement and receives the related principal and interest payments.

The terms and conditions of secured borrowings are negotiated on a transaction-by-transaction basis when each such borrowing is initiated or renewed. The amount borrowed is generally equal to the fair value of the securities pledged, as determined by the lending counterparty, less an agreed-upon discount, referred to as a “haircut.” Interest rates are generally fixed based on prevailing rates corresponding to the terms of the borrowings. Interest may be paid monthly or at the termination of a borrowing at which time the
Company may enter into a new borrowing at prevailing haircuts and rates with the same lending counterparty or repay that counterparty and negotiate financing with a different lending counterparty. None of the Company’s lending counterparties are obligated to renew or otherwise enter into new borrowings at the conclusion of existing borrowings. In response to declines in fair value of pledged securities due to changes in market conditions or the publishing of monthly security pay-down factors, lending counterparties typically require the Company to post additional securities as collateral, pay down borrowings or fund cash margin accounts with the counterparties in order to re-establish the agreed-upon collateral requirements. These actions are referred to as margin calls. Conversely, in response to increases in fair value of pledged securities, the Company routinely margin calls its lending counterparties in order to have previously pledged collateral returned.

Secured borrowings (and related pledged collateral, including accrued interest receivable), classified by collateral type and remaining maturities, and related weighted average borrowing rates as of the indicated dates were as follows (dollars in thousands):

Collateral Type	Agency Securities Pledged		Accrued Interest Receivable		Borrowings Outstanding		Average Borrowing Rates
September 30, 2020
Borrowings under repurchase arrangements with maturities of 30 days or less	$	6,065,774	$	15,052	$	5,743,751		0.23	%
Borrowings under repurchase arrangements with maturities of 31 to 90 days		1,469,324		3,733		1,400,246		0.23
Borrowings under repurchase arrangements with maturities of greater than 90 days		521,844		1,176		500,000		0.29
Similar borrowings secured by collateral for structured financings		833	–			833		7.94
	$	8,057,775	$	19,961	$	7,644,830		0.24

December 31, 2019
Borrowings under repurchase arrangements with maturities of 30 days or less	$	9,484,275	$	27,826	$	9,002,527		2.12	%
Borrowings under repurchase arrangements with maturities of 31 to 90 days		1,344,437		3,742		1,271,971		1.98
Similar borrowings secured by collateral for structured financings		915	–			915		7.99
	$	10,829,627	$	31,568	$	10,275,413		2.10

Average secured borrowings outstanding were $7.45 billion and $10.20 billion during the quarters ended September 30, 2020 and December 31, 2019, respectively. Average secured borrowings outstanding during the indicated periods differed from respective ending balances primarily due to changes in portfolio levels and differences in the timing of portfolio acquisitions relative to portfolio runoff.