10. Indebtedness

Notes Payable



						March 31, 2020					December 31, 2019
Advance Facilities	Interest Rate	Maturity Date	Collateral	Capacity Amount		Outstanding			Collateral Pledged		Outstanding		Collateral pledged
$325 advance facility⁽¹⁾	LIBOR+1.5% to 6.5%	August 2021	Servicing advance receivables	$	325	$	223		$	283	$	224	$	285
$250 advance facility⁽²⁾	LIBOR+1.5% to 2.6%	December 2020	Servicing advance receivables	250		118			138		98		167
$200 advance facility	LIBOR+2.5%	January 2021	Servicing advance receivables	200		83			117		63		125
$125 advance facility⁽³⁾	LIBOR+1.5% to 7.4%	July 2020	Servicing advance receivables	125		66			76		37		88
Advance facilities principal amount						490			$	614	422		$	665
Unamortized debt issuance costs						(1		)			—
Advance facilities, net						$	489				$	422


⁽¹⁾	The capacity amount was subsequently increased to $425 in April 2020 with a maturity date of October 2021.


⁽²⁾	This advance facility was subsequently terminated and transferred to another advance facility in April 2020.


⁽³⁾	The capacity amount was subsequently increased to $875 in April 2020 with a maturity date of April 2021.



						March 31, 2020					December 31, 2019
Warehouse Facilities	Interest Rate	Maturity Date	Collateral	Capacity Amount		Outstanding			Collateral pledged		Outstanding			Collateral pledged
$1,500 warehouse facility	LIBOR+1.0%	June 2020	Mortgage loans or MBS	$	1,500	$	1,214		$	1,160	$	759		$	733
$1,200 warehouse facility	LIBOR+1.5% to 3.0%	November 2020	Mortgage loans or MBS	1,200		566			602		683			724
$1,000 warehouse facility	LIBOR+1.4% to 2.3%	September 2020	Mortgage loans or MBS	1,000		593			608		762			783
$800 warehouse facility⁽¹⁾	LIBOR+2.1% to 3.8%	April 2021	Mortgage loans or MBS	800		528			639		589			656
$750 warehouse facility	LIBOR+1.4% to 2.8%	September 2020	Mortgage loans or MBS	750		347			355		411			425
$700 warehouse facility	LIBOR+1.3% to 2.2%	November 2020	Mortgage loans or MBS	700		628			649		469			488
$600 warehouse facility	LIBOR+2.0%	February 2021	Mortgage loans or MBS	600		169			203		174			202
$500 warehouse facility	LIBOR+2.0% to 4.0%	May 2020	Mortgage loans or MBS	500		22			23		336			349
$200 warehouse facility	LIBOR+1.4%	January 2021	Mortgage loans or MBS	200		100			101		136			136
$200 warehouse facility	LIBOR+1.2%	April 2021	Mortgage loans or MBS	200		21			21		27			27
$200 warehouse facility	LIBOR+2.0%	May 2020	Mortgage loans or MBS	200		59			83		54			78
$200 warehouse facility	LIBOR+1.3%	October 2020	Mortgage loans or MBS	200		—			—		—			—
$50 warehouse facility	LIBOR+2.0% to 6.0%	June 2020	Mortgage loans or MBS	50		4			6		11			15
$40 warehouse facility	LIBOR+3.3%	September 2020	Mortgage loans or MBS	40		6			7		5			6
Warehouse facilities principal amount						4,257			4,457		4,416			4,622
MSR Facility
$400 warehouse facility	LIBOR+3.5% or 6.1%	January 2023	Mortgage loans or MBS	400		150			836		150			945
$400 warehouse facility	LIBOR+2.3%	December 2020	Mortgage loans or MBS	400		75			190		—			200
$150 warehouse facility⁽¹⁾	LIBOR+2.8%	April 2021	Mortgage loans or MBS	150		40			119		—			130
$50 warehouse facility	LIBOR+2.8%	August 2020	Mortgage loans or MBS	50		30			71		10			84
MSR facilities principal amount						295			1,216		160			1,359
Warehouse and MSR facilities principal amount						4,552			$	5,673	4,576			$	5,981
Unamortized debt issuance costs						(1		)			(1		)
Warehouse facilities, net						$	4,551				$	4,575

Pledged Collateral:
Mortgage loans held for sale						$	3,659		$	3,748	$	3,826		$	3,931
Reverse mortgage interests						598			709		590			691
MSR						295			1,216		160			1,359


⁽¹⁾	Total capacity amount for this facility is $800 of which $150 is a sublimit for MSR financing.

Unsecured Senior Notes

Unsecured senior notes consist of the following:



Unsecured senior notes	March 31, 2020			December 31, 2019
$950 face value, 8.125% interest rate payable semi-annually, due July 2023	$	950		$	950
$750 face value, 9.125% interest rate payable semi-annually, due July 2026	750			750
$600 face value, 6.000% interest rate payable semi-annually, due January 2027⁽¹⁾	600			—
$600 face value, 6.500% interest rate payable semi-annually, due July 2021⁽²⁾	—			492
$300 face value, 6.500% interest rate payable semi-annually, due June 2022⁽²⁾	—			206
Unsecured senior notes principal amount	2,300			2,398
Unamortized debt issuance costs, premium and discount	(41		)	(32		)
Unsecured senior notes, net	$	2,259		$	2,366


⁽¹⁾	On January 16, 2020, the Company completed an offering of $600 aggregate principal amount of 6.000% Senior Notes due 2027 (the “2027 notes”).


⁽²⁾	This note was redeemed in full on February 15, 2020 using the net proceeds of the 2027 notes offering, together with cash on hand.

The ratios included in the indentures for the unsecured senior notes are incurrence-based compared to the customary ratio covenants that are often found in credit agreements that require a company to maintain a certain ratio. The incurrence-based covenants limit the issuer(s) and restricted subsidiaries ability to incur additional indebtedness, pay dividends, make certain investments, create liens, consolidate, merge or sell substantially all of their assets or enter into certain transactions with affiliates. The indentures contain certain events of default, including (subject, in some cases, to customary cure periods and materiality thresholds) defaults based on (i) the failure to make payments under the applicable indenture when due, (ii) breach of covenants, (iii) cross-defaults to certain other indebtedness, (iv) certain bankruptcy or insolvency events, (v) material judgments and (vi) invalidity of material guarantees.

The indentures provide that on or before certain fixed dates, the Company may redeem up to 40% of the aggregate principal amount of the unsecured senior notes with the net proceeds of certain equity offerings at fixed redemption prices, plus accrued and unpaid interest, to the redemption dates, subject to compliance with certain conditions. In addition, the Company may redeem all or a portion of the unsecured senior notes at any time on or after certain fixed dates at the applicable redemption prices set forth in the indentures plus accrued and unpaid interest, to the redemption dates. During the three months ended March 31, 2020, the Company repaid $100 in principal of outstanding notes. Additionally, the Company redeemed $598 in principal of outstanding notes during the three months ended March 31, 2020, resulting in a gain of $1. No notes were repurchased or redeemed during the three months ended March 31, 2019.

As of March 31, 2020, the expected maturities of the Company’s unsecured senior notes based on contractual maturities are as follows:



Year Ending December 31,	Amount
2020	$	—
2021	—
2022	—
2023	950
2024	—
Thereafter	1,350
Total unsecured senior notes principal amount	$	2,300

Other Nonrecourse Debt

Other nonrecourse debt consists of the following:



						March 31, 2020		December 31, 2019
Other nonrecourse debt	Issue Date	Maturity Date	Class of Note	Collateral Amount		Outstanding		Outstanding
Participating interest financing⁽¹⁾	—	—	—	$	—	$	4,045	$	4,284
Securitization of nonperforming HECM loans
Trust 2019-2	November 2019	November 2029	A, M1, M2, M3, M4, M5	306		297		333
Trust 2019-1	June 2019	June 2029	A, M1, M2, M3, M4, M5	286		269		302
Trust 2018-3	November 2018	November 2028	A, M1, M2, M3, M4, M5	209		190		209
Trust 2018-2	July 2018	July 2028	A, M1, M2, M3, M4, M5	157		137		148
Other nonrecourse debt principal amount						4,938		5,276
Unamortized debt issuance costs, premium and discount						7		10
Other nonrecourse debt, net						$	4,945	$	5,286


⁽¹⁾	Amounts represent the Company’s participating interest in GNMA HMBS securitized portfolios.

Participating Interest Financing

Participating interest financing represents the obligation of HMBS pools to third-party security holders. The Company issues HMBS in connection with the securitization of borrower draws and accrues interest on HECM loans. Proceeds are received in exchange for securitized advances on the HECM loan amounts transferred to GNMA, and the Company retains a beneficial interest (referred to as a “participating interest”) in the securitization trust in which the HECM loans and HMBS obligations are held and assume both issuer and servicer responsibilities in accordance with GNMA HMBS program guidelines. Monthly cash flows generated from the HECM loans are used to service the HMBS obligations. The interest rate is based on the underlying HMBS rate with a range of 1.8% to 5.6%.

Securitizations of Nonperforming HECM Loans

From time to time, the Company securitizes its interests in non-performing reverse mortgages. The transactions provide investors with the ability to invest in a pool of both non-performing HECM loans secured by one-to-four-family residential properties and a pool of REO properties acquired through foreclosure of a deed in lieu of foreclosure in connection with HECM loans that are covered by FHA insurance. The transactions provide the Company with access to liquidity for the non-performing HECM loan portfolio, ongoing servicing fees, and potential residual returns. The transactions are structured as secured borrowings with the reverse mortgage loans included in the consolidated financial statements as reverse mortgage interests and the related financing included in other nonrecourse debt. Interest is accrued at a rate of 2.3% to 6.0% on the outstanding securitized notes and recorded as interest expense in consolidated statements of operations. The HECM securitizations are callable with expected weighted average lives of less than one to three years. The Company may re-securitize the previously called loans from earlier HECM securitizations to achieve a lower cost of funds.

Financial Covenants

The Company’s credit facilities contain various financial covenants which primarily relate to required tangible net worth amounts, liquidity reserves, leverage requirements, and profitability requirements, which are measured at the Company’s operating subsidiary, Nationstar Mortgage LLC. The Company was in compliance with its required financial covenants as of March 31, 2020.