| DEBT OBLIGATIONS |
DEBT OBLIGATIONS
The following table presents certain information regarding Newcastle’s debt obligations at March 31, 2016:
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Collateral |
Debt Obligation/Collateral |
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Month Issued |
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Outstanding
Face
Amount |
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Carrying
Value |
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Final Stated Maturity |
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Weighted
Average
Coupon (A) |
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Weighted Average
Funding
Cost (B) |
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Weighted Average Life(Years) |
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Face Amount of
Floating Rate Debt |
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Outstanding Face Amount |
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Amortized
Cost Basis |
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Carrying
Value |
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Weighted Average Life
(Years) |
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Floating Rate Face Amount |
Other Bonds and Notes Payable |
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Mezzanine Note Payable |
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Oct 2015 |
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$ |
11,660 |
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$ |
11,575 |
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Oct 2016 |
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LIBOR+3.00% |
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6.38 |
% |
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0.6 |
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$ |
11,660 |
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$ |
19,433 |
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$ |
19,433 |
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$ |
19,433 |
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0.3 |
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$ |
19,433 |
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11,660 |
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11,575 |
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6.38 |
% |
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0.6 |
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11,660 |
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19,433 |
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19,433 |
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19,433 |
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0.3 |
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19,433 |
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Repurchase Agreements (C) |
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FNMA/FHLMC Securities |
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Mar 2016 |
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352,049 |
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352,049 |
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Apr 2016 |
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0.68% |
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0.68 |
% |
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0.1 |
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— |
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347,478 |
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358,403 |
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364,320 |
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5.6 |
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— |
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Golf Loans (D) |
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Aug 2015 |
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68,500 |
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68,325 |
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May 2016 |
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LIBOR+4.00% |
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5.95 |
% |
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0.2 |
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68,500 |
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N/A |
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N/A |
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N/A |
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N/A |
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N/A |
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420,549 |
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420,374 |
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1.54 |
% |
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0.1 |
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68,500 |
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347,478 |
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358,403 |
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364,320 |
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5.6 |
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— |
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Golf Credit Facilities |
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Vineyard II |
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Dec 1993 |
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200 |
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200 |
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Dec 2043 |
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2.11% |
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2.11 |
% |
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27.7 |
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200 |
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N/A |
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N/A |
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N/A |
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N/A |
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N/A |
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Capital Leases (Equipment) |
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May 2014 - Mar 2016 |
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11,124 |
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11,124 |
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Sep 2021 |
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3.25% to 16.16% |
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6.5 |
% |
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4.3 |
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— |
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N/A |
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N/A |
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N/A |
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N/A |
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N/A |
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11,324 |
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11,324 |
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6.42 |
% |
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4.7 |
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200 |
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N/A |
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N/A |
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N/A |
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N/A |
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N/A |
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Corporate |
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Junior subordinated notes payable |
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Mar 2006 |
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51,004 |
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51,223 |
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Apr 2035 |
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7.57% |
(E) |
7.53 |
% |
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19.1 |
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— |
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N/A |
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N/A |
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N/A |
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N/A |
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N/A |
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51,004 |
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51,223 |
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7.53 |
% |
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19.1 |
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— |
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N/A |
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N/A |
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N/A |
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N/A |
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N/A |
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Subtotal debt obligations |
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494,537 |
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494,496 |
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2.38 |
% |
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2.2 |
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$ |
80,360 |
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$ |
366,911 |
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$ |
377,836 |
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$ |
383,753 |
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5.3 |
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$ |
19,433 |
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Financing on subprime mortgage loans subject to call option (F) |
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372,874 |
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372,874 |
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Total debt obligations |
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$ |
867,411 |
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$ |
867,370 |
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(A) |
Weighted average, including floating and fixed rate classes. |
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(B) |
Including the effect of applicable hedges and deferred financing cost. |
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(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.
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(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.
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(E) |
LIBOR +2.25% after April 2016.
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(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:
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April 1, 2016 - December 31, 2016 |
$ |
3,010 |
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2017 |
3,012 |
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2018 |
2,997 |
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2019 |
2,598 |
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2020 |
1,208 |
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2021 |
17 |
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Thereafter |
— |
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Total minimum lease payments |
12,842 |
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Less: imputed interest |
(1,718 |
) |
Present value of net minimum lease payments |
$ |
11,124 |
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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.
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