Drive Shack Inc. Current report filing

Current report filing

DEBT OBLIGATIONS (Tables)

DEBT OBLIGATIONS (Tables)

12 Months Ended

Dec. 31, 2012

The following table presents certain information regarding Newcastle’s debt obligations and related hedges:

	December 31, 2012																											December 31, 2011
																Collateral
	Month Issued	Outstanding Face Amount		Carrying Value		Final Stated Maturity	Unhedged Weighted Average Funding Cost (A)		Weighted Average Funding Cost (B)			Weighted Average Maturity (Years)		Face Amount of Floating Rate Debt		Outstanding Face Amount (C)		Amortized Cost Basis (C)		Carrying Value (C)		Weighted Average Maturity (Years)		Floating Rate Face Amount (C)		Aggregate Notional Amount of Current Hedges (D)		Outstanding Face Amount		Carrying Value
Debt Obligation/Collateral

CDO Bonds Payable
CDO IV (E)	Mar 2004	$	79,898	$	79,811	Mar 2039	1.83%			5.02	%		1.3	$	69,098	$	168,111	$	155,646	$	151,250		1.9	$	43,202	$	69,098	$	106,645	$	106,454
CDO VI (E)	Apr 2005		91,578		91,578	Apr 2040	0.87%			5.35	%		4.8		88,495		180,039		92,932		119,184		3.1		49,393		88,495		91,141		91,141
CDO VIII	Nov 2006		518,501		517,541	Nov 2052	0.78%			2.22	%		2.4		510,901		707,189		523,202		551,058		2.9		385,978		154,450		577,133		575,736
CDO IX	May 2007		400,938		402,424	May 2052	0.59%			0.59	%		2.3		400,938		637,873		517,982		527,903		3.2		326,849		—		480,125		482,329
CDO X (F)	Jul 2007		—		—	Jul 2052	N/A			—			—		—		—		—		—		—		—		—		1,150,000		1,147,945
			1,090,915		1,091,354					2.08	%		2.5		1,069,432		1,693,212		1,289,762		1,349,395		2.9		805,422		312,043		2,405,044		2,403,605
Other Bonds and Notes Payable
MH Loans Portfolio I (G)	Apr 2010		70,056		66,199	Jul 2035	6.25%			6.25	%		4.2		—		118,746		100,124		100,124		6.8		909		—		70,109		69,256
MH Loans Portfolio II (G)	May 2011		117,907		117,191	Dec 2033	4.40%			4.40	%		3.9		—		153,193		150,123		150,123		5.6		25,727		—		126,856		125,630
Residential Mortgage Loans	Aug 2006		—		—	N/A	N/A			—			—		—		—		—		—		—		—		—		5,491		5,491
			187,963		183,390					5.07	%		4.0		—		271,939		250,247		250,247		6.1		26,636		—		202,456		200,377
Repurchase Agreements
CDO Securities (I)	Dec 2012		5,658		5,658	Mar 2013	LIBOR+2.25%			2.46	%		0.2		5,658		—		—		—		—		—		—		8,728		8,728
Non-agency RMBS (J)	Various		150,922		150,922	Jan 2013	LIBOR+2.00%			2.21	%		0.1		150,922		344,177		215,212		228,493		6.9		344,177		—		—		—
FNMA/FHLMC securities (K)	Various		772,855		772,855	Various	0.53%			0.53	%		0.1		772,855		768,619		818,866		820,536		3.5		768,619		N/A		231,012		231,012
			929,435		929,435					0.81	%		0.1		929,435		1,112,796		1,034,078		1,049,029		4.6		1,112,796		—		239,740		239,740
Mortgage Notes Payable
BPM Senior Living Facilities	Jul 2012		88,400		88,400	Aug 2019	3.44%			3.44	%		6.2		23,400		N/A		138,131		138,131		N/A		—		23,400		—		—
Utah Senior Living Facilities	Nov 2012		16,000		16,000	Oct 2017	LIBOR+3.75%	(H)		4.75	%		4.8		16,000		N/A		22,262		22,262		N/A		—		—		—		—
Courtyards Senior living facilities	Dec 2012		16,125		16,125	Oct 2017	LIBOR+3.75%	(H)		4.75	%		4.8		16,125		N/A		21,494		21,494		N/A		—		—		—		—
			120,525		120,525					3.79	%		5.8		55,525		N/A		181,887		181,887		N/A		—		23,400		—		—
Corporate
Junior subordinated notes payable	Mar 2006		51,004		51,243	Apr 2035	7.574% (M)			7.40	%		22.3		—		—		—		—		—		—		—		51,004		51,248
			51,004		51,243					7.40	%		22.3		—		—		—		—		—		—		—		51,004		51,248
Subtotal debt obligations			2,379,842		2,375,947					2.02	%		2.3	$	2,054,392	$	3,077,947	$	2,755,974	$	2,830,558		3.8	$	1,944,854	$	335,443	$	2,898,244	$	2,894,970
Financing on subprime mortgage loans subject to call option	(L)		406,217		405,814																								406,217		404,723
Total debt obligations		$	2,786,059	$	2,781,761																							$	3,304,461	$	3,299,693

(A)	Weighted average, including floating and fixed rate classes and including the amortization of deferred financing costs.
(B)	Including the effect of applicable hedges.
(C)	Excluding (i) restricted cash held in CDOs to be used for principal and interest payments of CDO debt, and (ii) operating cash in senior living entities.
(D)	Including a $23.4 million notional amount of interest rate cap agreement in for the mortgage notes payable, and $69.1 million and $88.5 million of interest rate swap agreements in CDOs IV and VI, respectively, which were economic hedges not designated as hedges for accounting purposes.
(E)	These CDOs were not in compliance with their applicable over collateralization tests as of December 31, 2012. Newcastle is not receiving cash flows from these CDOs (other than senior management fees and cash flows on senior classes of bonds that were repurchased), since net interest is being used to pay debt, and expects these CDOs to remain out of compliance for the foreseeable future.
(F)	Deconsolidated on September 12, 2012.
(G)	Excluding $20.5 million face amount of other bonds payable relating to MH loans Portfolio I sold to certain Newcastle CDOs, which were eliminated in consolidation.
(H)	These financings have a LIBOR floor of 1%.
(I)	The counterparty of this repurchase agreement is Bank of America. It is secured by $21.0 million face amount of notes issued by Newcastle CDO VI, which is eliminated in consolidation. The maximum recourse to Newcastle is $1.4 million. This repurchase agreement was subsequently paid off in January 2013.
(J)	The counterparty on these repurchase agreements is Credit Suisse.
(K)	The counterparties on these repurchase agreements are Bank of America, Barclays, Citi and Goldman Sachs. Interest rates on these repurchase agreements are fixed, but will be reset on a short-term basis.
(L)	Issued in April 2006 and July 2007. See Note 6 regarding the securitizations of Subprime Portfolios I and II.
(M)	LIBOR + 2.25% after April 2016.

Schedule of Junior Subordinated Notes Payable Exchange Agreement

The following table presents certain information regarding the exchange, as of the date of the exchange:

Consideration

Repurchased junior
subordinated notes

Cash

Reissued CDO
bonds

Total

Outstanding face amount

52,094

9,715

37,625

47,340

Weighted average coupon

7.574%

(A)

N/A

LIBOR + 0.66%

(B)

Maturity

April 2035

June 2052

Collateral

General credit of Newcastle

Assets within the
respective CDOs

(A)	LIBOR + 2.25% after April 2016.

(B)	Weighted average effective interest rate of approximately LIBOR+0.35% after the Exchange.

Schedule of Debt Maturity

Newcastle’s debt obligations (gross of $4.3 million of discounts at December 31, 2012) have contractual maturities as follows:


	Nonrecourse		Recourse		Total
2013	$	4,786	$	925,192	$	929,978
2014		1,713		—		1,713
2015		2,274		—		2,274
2016		2,305		—		2,305
2017		32,763		—		32,763
Thereafter		1,817,026		—		1,817,026
Total	$	1,860,867	$	925,192	$	2,786,059