Drive Shack Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

DEBT OBLIGATIONS (Tables)

DEBT OBLIGATIONS (Tables)

9 Months Ended

Sep. 30, 2013

The following table presents certain information regarding Newcastles debt obligations and related hedges at September 30, 2013:

																		Collateral
Debt Obligation/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)
CDO Bonds Payable
CDO VI (E)	Apr 2005		91,908		91,908	Apr 2040		0.85	%			5.35	%		5.7		88,671		170,592		90,638		125,464		3.0		42,323		88,671
CDO VIII	Nov 2006		344,953		344,351	Nov 2052		0.88	%			2.37	%		1.3		337,353		547,236		387,615		417,192		2.3		306,024		105,393
CDO IX	May 2007		280,647		282,214	May 2052		0.56	%			0.53	%		0.5		280,647		557,946		433,394		442,687		2.5		290,976
			717,508		718,473							2.03	%		1.6		706,671		1,275,774		911,647		985,343		2.5		639,323		194,064
Other Bonds and Notes Payable
MH Loans Portfolio I (F)	Apr 2010		57,684		54,230	Jul 2035		6.47	%			6.47	%		4.1				106,304		91,488		91,488		6.1		670
MH Loans Portfolio II	May 2011		99,979		99,568	Dec 2033		4.61	%			4.61	%		3.8				134,641		132,728		132,728		4.9		22,104
			157,663		153,798							5.27	%		3.9				240,945		224,216		224,216		5.5		22,774
Repurchase Agreements (G)
FNMA/FHLMC securities (H)	Sep 2013		361,836		361,836	Oct 2013		0.38	%			0.38	%		0.1		361,836		362,484		386,640		387,608		3.7		362,484
Newcastle CDO IX-Class A-2	Sep 2013		15,050		15,050	Oct 2013		LIBOR+1.65	%			1.83	%		0.1		15,050
			376,886		376,886							0.44	%		0.1		376,886		362,484		386,640		387,608		3.7		362,484
Mortgage Notes Payable
BPM Senior Housing Facilities	Jul 2012		107,007		107,007	Sep 2019		4.12	%			4.42	%		5.6				N/A		129,767		129,767		N/A
Utah Senior Housing Facilities	Nov 2012		16,000		16,000	Oct 2017		LIBOR+3.75	%	(I)		5.15	%		4.0		16,000		N/A		21,059		21,059		N/A
Courtyards Senior Housing facilities	Dec 2012		16,125		16,125	Oct 2017		LIBOR+3.75	%	(I)		5.06	%		4.0		16,125		N/A		20,179		20,179		N/A
Woodside Senior Housing Facilities	Jul 2013		14,100		14,100	Aug 2016		LIBOR+3.75	%			4.58	%		2.8		14,100		N/A		18,667		18,667		N/A
Florida Senior Housing Facilities
GE Financing	Aug 2013		93,521		93,521	Jul 2018		LIBOR+3.75	%	(I)		5.00	%		4.8		93,521		N/A		127,966		127,966		N/A
Freddie Mac Financing	Aug 2013		41,394		39,678	Apr 2020		4.00	%	(J)		4.90	%		5.3				N/A		69,145		69,145		N/A
Seller Financing	Aug 2013		11,432		9,432	Apr 2018		1.68	%	(K)		1.68	%		4.8		11,432		N/A						N/A
Glen Riddle Senior Housing Facilities	Aug 2013		16,875		16,875	Oct 2017		LIBOR+3.75	%	(I)		5.01	%		4.0		16,875		N/A		21,899		21,899		N/A
Royal Palm Senior Housing Facilities			14,250		14,250	Jul 2018		LIBOR+3.75	%	(I)		4.99	%		4.8		14,250		N/A		18,644		18,644		N/A
Schenley Gardens Senior Housing Facilities	Sep 2013		8,250		8,250	Oct 2017		LIBOR+3.75	%	(I)		5.04	%		4.0		8,250		N/A		16,454		16,454		N/A
			338,954		335,238							4.70	%		4.9		190,553		N/A		443,780		443,780		N/A
Corporate
Junior subordinated notes payable	Mar 2006		51,004		51,239	Apr 2035		7.574	%	(L)		7.39	%		21.6
			51,004		51,239							7.39	%		21.6
Subtotal debt obligations			1,642,015		1,635,634							2.70	%		2.8	$	1,274,110	$	1,879,203	$	1,966,283	$	2,040,947		3.1	$	1,024,581	$	194,064
Financing on subprime mortgage loans subject to call option (M)			406,217		406,217
Total debt obligations		$	2,048,232	$	2,041,851

See notes on next page

(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 housing entities.

(D)

Including a $88.7 million notional amount of interest rate swap agreement in CDO VI, which was an economic hedge not designated as a hedge for accounting purposes.

(E)

This CDO was not in compliance with its applicable over collateralization tests as of September 30, 2013. Newcastle is not receiving cash flows from this CDO (other than senior management fees and cash flows on senior classes of bonds that were repurchased), since net interest is being used to repay debt, and expects this CDO to remain out of compliance for the foreseeable future.

(F)

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.

(G)

These repurchase agreements had $0.05 million of associated accrued interest payable at September 30, 2013. $376.9 million face amount of these repurchase agreements were renewed subsequent to September 30, 2013. The counterparties on these repurchase agreements are Bank of America ($262.4 million), Barclays ($18.5 million), Citi ($38.4 million), Goldman Sachs ($9.8 million) and Nomura ($47.8 million).

	(H)	Interest rates on these repurchase agreements are fixed, but will be reset on a short-term basis.
	(I)	These financings are with GE and are split between two separate credit facilities. Utah, Courtyards, Glen Riddle and Schenley Gardens share one credit facility and Florida and Royal Palm share a separate credit facility. These financings have a LIBOR floor of 1%.
	(J)	Upon assuming these loans, Newcastle bought down the interest rate to 4% for the first two years. The interest rate will be fixed, ranging from 5.99% to 6.76% for the remaining term.
	(K)	The interest rate for the first two years is based on applicable US Treasury Security rates. The interest rate for years 3 through 5 is 4.5%, 4.75% and 5.0%, respectively.
	(L)	LIBOR +2.25% after April 2016.
	(M)	Issued in April 2006 and July 2007. See Note 6 regarding the securitizations of Subprime Portfolios I and II.