Short-Term Debt

We enter into repurchase agreements, bank warehouse agreements, and other forms of collateralized (and generally uncommitted) short-term borrowings with several banks and major investment banking firms. At September 30, 2018, we had outstanding agreements with several counterparties and we were in compliance with all of the related covenants. For additional information about these financial covenants and our short-term debt, see Part I, Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q and Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2017.

The table below summarizes our short-term debt, including the facilities that are available to us, the outstanding balances, the weighted average interest rate, and the maturity information at September 30, 2018 and December 31, 2017.

Table 12.1 – Short-Term Debt



	September 30, 2018
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate		Maturity	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse ⁽¹⁾	4	$	578,157	$	1,425,000	3.83	%	12/2018-8/2019	177
Real estate securities repo⁽¹⁾	8	780,818		—		3.29	%	10/2018-12/2018	27
Single-family rental loan warehouse ⁽²⁾	2	15,859		400,000		4.53	%	6/2020-6/2021	661
Fix-and-flip loan warehouse ⁽²⁾	2	49,441		60,000		5.63	%	10/2019-11/2019	205
Total Short-Term Debt	16	$	1,424,275



	December 31, 2017
(Dollars in Thousands)	Number of Facilities	Outstanding Balance		Limit		Weighted Average Interest Rate		Maturity	Weighted Average Days Until Maturity
Facilities
Residential loan warehouse ⁽¹⁾	4	$	1,039,666	$	1,575,000	3.17	%	1/2018-12/2018	197
Real estate securities repo⁽¹⁾	9	648,746		—		2.69	%	1/2018-3/2018	28
Total Short-Term Debt Facilities	13	1,688,412
Convertible notes, net	N/A	250,270		—		4.63	%	4/2018	105
Total Short-Term Debt		$	1,938,682


(1)	Borrowings under our facilities are generally charged interest based on a specified margin over the one-month LIBOR interest rate. At September 30, 2018, all of these borrowings were under uncommitted facilities and were due within 364 days (or less) of the borrowing date.


(2)	Due to the revolving nature of the borrowings under these facilities, we have classified these facilities as short-term debt at September 30, 2018. Borrowings under these facilities will be repaid as the underlying loans mature or are sold to third parties or transferred to securitizations.

The fair value of held-for-sale residential loans and real estate securities pledged as collateral under our short-term debt facilities was $622 million and $918 million, respectively, at September 30, 2018 and $1.15 billion and $788 million, respectively, at December 31, 2017. At September 30, 2018, the fair value of our real estate securities pledged as collateral included $129 million of securities retained from our consolidated Sequoia Choice securitizations and $11 million of securities we owned that were issued by consolidated Freddie Mac K-series securitizations. At September 30, 2018, the fair value of single-family rental and fix-and-flip loans pledged as collateral under our warehouse facilities was $20 million and $92 million, respectively. For the three and nine months ended September 30, 2018, the average balances of our short-term debt facilities were $1.56 billion and $1.47 billion, respectively. At September 30, 2018 and December 31, 2017, accrued interest payable on our short-term debt facilities was $3 million and $2 million, respectively.

During the second quarter of 2017, $288 million principal amount of 4.625% convertible senior notes and $2 million of unamortized deferred issuance costs were reclassified from long-term debt to short-term debt, as the maturity of the notes was less than one year as of April 2017. Additionally, during the second quarter of 2017, we repurchased $37 million par value of these notes at a premium and recorded a loss on extinguishment of debt of $1 million in Realized gains, net on our consolidated statements of income. In April 2018, we repaid these $250 million convertible notes and all related accrued interest in full. See Note 14 for additional information on our convertible notes.

We also maintain a $10 million committed line of credit with a financial institution that is secured by certain mortgage-backed securities with a fair market value of $4 million at September 30, 2018. At both September 30, 2018 and December 31, 2017, we had no outstanding borrowings on this facility.

Remaining Maturities of Short-Term Debt

The following table presents the remaining maturities of our secured short-term debt by the type of collateral securing the debt at September 30, 2018.

Table 12.2 – Short-Term Debt by Collateral Type and Remaining Maturities



	September 30, 2018
(In Thousands)	Within 30 days		31 to 90 days		Over 90 days		Total
Collateral Type
Held-for-sale residential loans	$	—	$	141,712	$	436,445	$	578,157
Real estate securities	575,017		205,801		—		780,818
Single-family rental loans	—		—		15,859		15,859
Fix-and-flip loans	7,913		9,091		32,437		49,441
Total Short-Term Debt	$	582,930	$	356,604	$	484,741	$	1,424,275