Quarterly report pursuant to Section 13 or 15(d)

DEBT OBLIGATIONS

v3.4.0.3
DEBT OBLIGATIONS
3 Months Ended
Mar. 31, 2016
Debt Disclosure [Abstract]  
DEBT OBLIGATIONS
DEBT OBLIGATIONS
The following table presents certain information regarding Newcastle’s debt obligations at March 31, 2016:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Collateral
Debt Obligation/Collateral
 
Month Issued
 
Outstanding
Face
Amount
 
Carrying
Value
 
Final Stated Maturity
 
Weighted
Average
Coupon (A)
 
Weighted Average
Funding
Cost (B)
 
Weighted Average Life(Years)
 
Face Amount of
Floating Rate Debt
 
Outstanding Face Amount
 
Amortized
Cost Basis
 
Carrying
Value
 
 Weighted Average Life
(Years)
 
Floating Rate Face Amount
Other Bonds and Notes Payable
 
 
 
 

 
 

 
 
 
 
 
 

 
 
 
 

 
 

 
 

 
 

 
 
 
 

Mezzanine Note Payable
 
Oct 2015
 
$
11,660

 
$
11,575

 
Oct 2016
 
LIBOR+3.00%
 
6.38
%
 
0.6
 
$
11,660

 
$
19,433

 
$
19,433

 
$
19,433

 
0.3
 
$
19,433

 
 
 
 
11,660

 
11,575

 
 
 
 
 
6.38
%
 
0.6
 
11,660

 
19,433

 
19,433

 
19,433

 
0.3
 
19,433

Repurchase Agreements (C)
 
 
 
 

 
 

 
 
 
 
 
 

 
 
 
 

 
 

 
 

 
 

 
 
 
 

FNMA/FHLMC Securities
 
Mar 2016
 
352,049

 
352,049

 
Apr 2016
 
0.68%
 
0.68
%
 
0.1
 

 
347,478

 
358,403

 
364,320

 
5.6
 

Golf Loans (D)
 
Aug 2015
 
68,500

 
68,325

 
May 2016
 
LIBOR+4.00%
 
5.95
%
 
0.2
 
68,500

 
N/A

 
N/A

 
N/A

 
N/A
 
N/A

 
 
 
 
420,549

 
420,374

 
 
 
 
 
1.54
%
 
0.1
 
68,500

 
347,478

 
358,403

 
364,320

 
5.6
 

Golf Credit Facilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vineyard II
 
Dec 1993
 
200

 
200

 
Dec 2043
 
2.11%
 
2.11
%
 
27.7
 
200

 
N/A

 
N/A

 
N/A

 
N/A
 
N/A

Capital Leases (Equipment)
 
May 2014 - Mar 2016
 
11,124

 
11,124

 
Sep 2021
 
3.25% to 16.16%
 
6.5
%
 
4.3
 

 
N/A

 
N/A

 
N/A

 
N/A
 
N/A

 
 
 
 
11,324

 
11,324

 
 
 
 
 
6.42
%
 
4.7
 
200

 
N/A

 
N/A

 
N/A

 
N/A
 
N/A

Corporate
 
 
 
 

 
 

 
 
 
 
 
 

 
 
 
 

 
 

 
 

 
 

 
 
 
 

Junior subordinated notes payable
 
Mar 2006
 
51,004

 
51,223

 
Apr 2035
 
7.57%
(E)
7.53
%
 
19.1
 

 
N/A

 
N/A

 
N/A

 
N/A
 
N/A

 
 
 
 
51,004

 
51,223

 
 
 
 
 
7.53
%
 
19.1
 

 
N/A

 
N/A

 
N/A

 
N/A
 
N/A

Subtotal debt obligations
 
 
 
494,537

 
494,496

 
 
 
 
 
2.38
%
 
2.2
 
$
80,360

 
$
366,911

 
$
377,836

 
$
383,753

 
5.3
 
$
19,433

Financing on subprime mortgage loans subject to call option (F)
 
 
 
372,874

 
372,874

 
 
 
 
 
 

 
 
 
 

 
 

 
 

 
 

 
 
 
 

Total debt obligations
 
 
 
$
867,411

 
$
867,370

 
 
 
 
 
 

 
 
 
 

 
 

 
 

 
 

 
 
 
 


(A)
Weighted average, including floating and fixed rate classes.
(B)
Including the effect of applicable hedges and deferred financing cost.
(C)
These repurchase agreements had $0.6 million of accrued interest payable at March 31, 2016. The counterparties on these repurchase agreements are Citi ($352.0 million) and Credit Suisse ($68.5 million). Newcastle has margin exposures on a total of $420.5 million repurchase agreements related to the financing of FNMA/FHLMC securities and Golf loans. To the extent that the value of the collateral underlying these repurchase agreements declines, Newcastle may be required to post margin, which could significantly impact its liquidity. $352.0 million of repurchase agreements were repaid in April 2016 as part of the sale of the FNMA/FHLMC securities.
(D)
The golf repurchase agreement is collateralized by assets of the Golf business. The carrying amount of the golf repurchase agreement is reported net of deferred financing costs of $0.2 million as of March 31, 2016.
(E)
LIBOR +2.25% after April 2016.
(F)
See Note 6 regarding the securitizations of Subprime Portfolio I and II.

In January 2016, Newcastle settled on a trade to sell $350.3 million face amount of agency FNMA/FHLMC fixed-rate securities at an average price of 103.2% for total proceeds of $361.3 million and repaid $348.6 million of repurchase agreements associated with these securities.

In January 2016, Newcastle settled on a trade to purchase $102.7 million face amount of agency FNMA/FHLMC fixed-rate securities at an average price of 103.2% for total proceeds of $105.9 million. This transaction was financed with $102.2 million of repurchase agreements.

On February 26, 2016, Newcastle extended the repurchase agreement on the Golf loans to mature on May 31, 2016, with an option to extend to June 30, 2016. The repurchase agreement bears interest at LIBOR + 4.00%.

In March 2016, Newcastle entered into a trade to sell $347.5 million face amount of agency FNMA/FHLMC fixed-rate securities at an average price of 104.9% for total proceeds of $364.3 million and recognized a gain of approximately $5.9 million. Newcastle repaid $352.0 million of repurchase agreements associated with these securities.

In March 2016, Newcastle entered into a trade to purchase $363.1 million face amount of agency FNMA/FHLMC fixed-rate securities at an average price of 105.0% for total proceeds of $381.1 million. This transaction was financed with $366.4 million of repurchase agreements.

For a discussion of bonds payable deconsolidated during the period, see Variable Interest Entities in Note 2.

The Golf business leases certain golf carts and other equipment under capital leases. The agreements typically provide for minimum rentals plus executory costs. Lease terms range from 36 to 66 months. Certain leases include bargain purchase options at lease expiration.

The future minimum lease payments required under the capital leases and the present value of the net minimum lease payments as of March 31, 2016 are as follows:

April 1, 2016 - December 31, 2016
$
3,010

2017
3,012

2018
2,997

2019
2,598

2020
1,208

2021
17

Thereafter

Total minimum lease payments
12,842

Less: imputed interest
(1,718
)
Present value of net minimum lease payments
$
11,124


Newcastle’s non-CDO financings and golf credit facilities contain various customary loan covenants. Newcastle was in compliance with all of these covenants as of March 31, 2016.