Drive Shack Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

DEBT OBLIGATIONS (Tables)

DEBT OBLIGATIONS (Tables)

12 Months Ended

Dec. 31, 2013

The following table presents certain information regarding Newcastles debt obligations and related hedges:


	December 31, 2013																								December 31, 2012
														Collateral
							Unhedged																Aggregate
							Weighted		Weighted	Weighted		Face							Weighted		Floating		Notional
			Outstanding			Final	Average		Average	Average		Amount		Outstanding		Amortized			Average		Rate		Amount of		Outstanding
	Month		Face		Carrying	Stated	Funding		Funding	Maturity		of Floating		Face		Cost		Carrying	Maturity		Face		Current		Face		Carrying
Debt Obligation/Collateral	Issued		Amount		Value	Maturity	Cost (A)		Cost (B)	(Years)		Rate Debt		Amount (C)		Basis (C)		Value (C)	(Years)		Amount (C)		Hedges(D)		Amount		Value
CDO Bonds Payable
CDO VI ^(E)	Apr 2005	$	92,018	$	92,018	Apr 2040	0.85%		5.35%	5.5	$	88,727	$	166,452	$	88,965	$	123,478	2.3	$	40,482	$	88,727	$	91,578	$	91,578
CDO VIII	Nov 2006		264,733		264,277	Nov 2052	0.88%		2.45%	1.5		257,133		421,487		317,202		346,101	1.7		184,585		105,031		518,501		517,541
CDO IX	May 2007		186,765		188,230	May 2052	0.56%		0.50%	0.6		186,765		433,012		357,224		366,581	1.9		162,115				400,938		402,424
Repaid Debt																									79,898		79,811
			543,516		544,525				2.26%	1.9		532,625		1,020,951		763,391		836,160	1.9		387,182		193,758		1,090,915		1,091,354
Other Bonds & Notes Payable
MH loans Portfolio I ^(F)	Apr 2010		53,753		50,424	Jul 2035	6.56%		6.56%	4.1				102,681		91,924		91,924	6.1		612				70,056		66,199
MH loans Portfolio II	May 2011		93,863		93,536	Dec 2033	4.70%		4.70%	3.8				128,975		128,117		128,117	4.9		21,321				117,907		117,191
NCT 2013-VI IMM-1 ^(I)	Nov 2013		96,129		86,319	Apr 2040	LIBOR+0.25%		0.42%	2.0		96,129							0.0
			243,745		230,279				3.50%	3.1		96,129		231,656		220,041		220,041	5.4		21,933				187,963		183,390
Repurchase Agreements ^(G)
FNMA/FHLMC securities ^(H)	Dec 2013		516,134		516,134	Jan 2014	0.40%		0.40%	0.1		516,134		514,994		547,639		551,270	3.6		514,994				772,855		772,855
CDO Securities ^(I)	Dec 2013		15,094		15,094	Jan 2014	LIBOR+1.65%		1.82%	0.1		15,094							0.0						5,658		5,658
Residential Mortgage Loans	Nov 2013		25,119		25,119	Nov 2014	LIBOR+2.00%		2.17%	0.9		25,119		36,029		27,173		27,173	5.5		36,029
Repaid Debt																									150,922		150,922
			556,347		556,347				0.5%	0.1		556,347		551,023		574,812		578,443	3.7		551,023				929,435		929,435

Mortgage Notes Payable
						Aug 2018 to
Fixed Rate			878,579		878,244	Jan 2024	1.43% to 4.30%	(J)(K)	4.72%	7.4				N/A		1,193,583		1,193,583	N/A		N/A				88,400		88,400
						Aug 2016 to	LIBOR+3.50% to
Floating Rate			198,584		198,584	Dec 2018	LIBOR+3.75%		4.88%	4.1		198,584		N/A		270,175		270,175	N/A		N/A				32,125		32,125

			1,077,163		1,076,828				4.75%	6.8		198,584		N/A		1,463,758		1,463,758	N/A		N/A				120,525		120,525


	December 31, 2013																								December 31, 2012
															Collateral
							Unhedged																	Aggregate
							Weighted			Weighted	Weighted		Face							Weighted				Notional
		Outstanding				Final	Average			Average	Average		Amount		Outstanding		Amortized			Average		Floating		Amount of	Outstanding
	Month	Face		Carrying		Stated	Funding			Funding	Maturity		of Floating		Face		Cost		Carrying	Maturity		Rate Face		Current	Face		Carrying
Media Credit Facilities	Issued	Amount		Value		Maturity	Cost (A)			Cost (B)	(Years)		Rate Debt		Amount (C)		Basis (C)		Value (C)	(Years)		Amount (C)		Hedges(D)	Amount		Value
GateHouse Credit Facilities: (Q)
Revolving Credit Facilities	Nov 2013	$	25,000	$	25,000	Nov 2018	LIBOR+3.25%			3.42%	4.9	$	25,000		N/A	$		$		N/A		N/A			$		$
Term Loan A	Nov 2013		25,000		25,000	Nov 2018	LIBOR+4.25%	(L)		5.00%	4.0		25,000		N/A					N/A		N/A
Term Loan B	Nov 2013		50,000		50,000	Nov 2018	LIBOR+8.00%	(L)		8.75%	4.0		50,000		N/A					N/A		N/A
Second Lien Credit Facility	Nov 2013		50,000		49,016	Nov 2019	LIBOR+11.00%			11.17%	5.9		50,000		N/A					N/A		N/A
Local Media Group Credit Facility	Sep 2013		33,000		33,000	Sep 2018	LIBOR+6.50%		(M)	7.50%	4.3		33,000		N/A					N/A		N/A
			183,000		182,016					7.93%	4.7		183,000		N/A					N/A		N/A
Golf Credit Facilities (Q)
First Lien Loan	Dec 2013		46,922		46,922	Dec 2018	LIBOR+4.00%	(N)		4.50%	4.0		46,922		N/A					N/A		N/A
Second Lien Loan	Dec 2013		105,576		105,576	Dec 2018	5.50%			5.50%	4.0				N/A					N/A		N/A
			152,498		152,498					5.19%	4.0		46,922		N/A					N/A		N/A
Corporate

Junior subordinated notes payable	Mar 2006		51,004		51,237	Apr 2035	7.57%	(O)		7.39%	21.3															51,004		51,243
			51,004		51,237					7.39%	21.3															51,004		51,243

Subtotal debt obligation			2,807,273		2,793,730					3.60%	4.2	$	1,613,607	$	1,803,630	$	3,022,002	$	3,098,402	2.9	$	960,138	$	193,758		2,143,364		2,139,317

Financing on subprime mortgage loans subject to call option	(P)		406,217		406,217																					406,217		405,814

Total debt obligation		$	3,213,490	$	3,199,947																				$	2,786,059	$	2,781,761


	(A)	Weighted average, including floating and fixed rate classes.
	(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 from the senior housing business.
	(D)	Including $88.7 million notional amount of interest rate swap in CDO VI, which was an economic hedge not designed as a hedge for accounting purposes.
	(E)	This CDO was not in compliance with its applicable over collateralization tests as of December 31, 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 thisCDO to remain out of compliance for the forseeable future.
	(F)	Excluding $20.5 million 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 $0.1 million accrued interest payable at December 31, 2013. $556.3 million face amount of these repurchase agreements were renewed subsequent to December 31, 2013. The counterparties on these repurchase agreements are Bank of America ($299.1 million), Barclays ($138.0 million), Citi ($35.6 million), Goldman Sachs ($7.4 million), Nomura ($51.1 million) and Credit Suisse ($25.1 million).
	(H)	Interest rates on these repurchase agreements are fixed, but will be reset on a short-term basis.
	(I)	Represents refinancing of repurchased Newcastle CDO bonds where collateral is, therefore, eliminated in consolidation period.
	(J)	For loans totaling $41.2 million issued in August 2013, Newcastle bought down the interest rate to 4% for the first two years. Thereafter, the interest rate will range from 5.99% to 6.76%.
	(K)	For a loan with a total balance of $11.4 million, the interest rate for the first two years is based on the applicable US Treasury Security rates. The interest rate for years 3 through 5 is 4.5%, 4.75% and 5.0%, respectively.
	(L)	This financing has a LIBOR floor of 0.75%.
	(M)	This financing has a LIBOR floor of 1.0%
	(N)	Interest rate on this is based on 3 month LIBOR with a LIBOR floor of 0.5%.
	(O)	Issued in April 2006 and July 2007. Secured by the general credit of Newcastle. See Note 7 regarding the securitizations of Subprime Portfolio I and II.
	(P)	LIBOR +2.25% after April 2016.
	(Q)	These facilities are collateralized by all the assets of the respective businesses.

Schedule of contractual maturities of debt obligations

Newcastles debt obligations (gross of $13.5 million of discounts at December 31, 2013) have contractual maturities as follows:


	Nonrecourse		Recourse		Total
2014	$	13,593	$	560,659	$	574,252
2015		16,537		5,813		22,350
2016		41,083		9,625		50,708
2017		73,297		162,529		235,826
2018		142,789		103,219		246,008
Thereafter		2,034,346		50,000		2,084,346
Total	$	2,321,645	$	891,845	$	3,213,490