Item 1.01. Entry into a Material Definitive Agreement.
of its subsidiaries (each a “Subsidiary” and together the “Subsidiaries”)
entered into a
(“RBC”) through the execution of a Master Repurchase Agreement (the “Master
Repurchase Agreement”) between the Subsidiaries as sellers, RBC as buyer and the
Company as Guarantor. Pursuant to the Master Repurchase Agreement, the
Subsidiaries may sell certain whole loan assets to RBC and later repurchase such
whole loan assets from RBC. The Master Repurchase Agreement expires on
to the terms of the Master Repurchase Agreement.
The amount expected to be advanced by RBC is generally in line with other
similar agreements that the Company or one or more of its subsidiaries has
entered into, which is a percentage of the unpaid principal balance or market
value of the whole loan asset depending on the delinquency of the underlying
whole loan asset. Similarly, the interest rate on any outstanding balance under
the Master Repurchase Agreement that the applicable Subsidiary is required to
pay RBC is generally in line with other similar agreements that the Company or
one or more of its subsidiaries has entered into, where the interest rate is
equal to the sum of (1) a pricing spread and (2) the average SOFR for each
Government Securities Business Day beginning on
day that is two
whole loan asset is repurchased by the applicable Affiliate. Additionally, RBC
is under no obligation to purchase the whole loan assets we offer to sell to
The obligations of the Subsidiaries under the Master Repurchase Agreement are
guaranteed by the Company pursuant to a Guaranty (the “Guaranty”) executed
contemporaneously with the master Repurchase Agreement. In addition, and similar
to other repurchase agreements the Company has entered into, the Company is
subject to various financial and other covenants, including those related to (1)
tangible net worth; (2) a maximum ratio of indebtedness to tangible net worth;
and (3) minimum liquidity.
In addition, the Master Repurchase Agreement and Guaranty contain events of
default (subject to certain materiality thresholds and grace periods), including
payment defaults, breaches of covenants and/or certain representations and
warranties, cross-defaults, insolvency and other events of default customary for
this type of transaction. The remedies for such events of default are also
customary for this type of transaction and include the acceleration of the
amounts outstanding under the Master Repurchase Agreement and RBC’s right to
liquidate the purchased whole loan assets then subject to the Master Repurchase
The Subsidiaries are also required to pay certain customary fees to RBC to
reimburse RBC for certain costs and expenses incurred in connection with RBC’s
management and ongoing administration of the Master Repurchase Agreement and its
review of the whole loan assets subject to the Master Repurchase Agreement and
certain costs associated with early repurchases.
A copy of the Master Repurchase Agreement is attached hereto as Exhibit 10.1 and
incorporated herein by reference. A copy of the Guaranty is attached hereto as
Exhibit 10.2 and incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information required by Item 2.03 contained in Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit No. Description
Exhibit 10.1 Master Repurchase Agreement among
Exhibit 10.2 Guaranty Agreement by
Bank of Canada, dated
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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