|
MARYLAND
|
46-0633510
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, par value $0.01 per share
|
RESI
|
New York Stock Exchange
|
Large Accelerated Filer
|
o
|
|
Accelerated Filer
|
x
|
Non-Accelerated Filer
|
o
|
|
Smaller Reporting Company
|
o
|
|
|
|
Emerging Growth Company
|
o
|
•
|
our ability to implement our business strategy;
|
•
|
our ability to make distributions to our stockholders;
|
•
|
the potential for the COVID-19 pandemic to adversely affect our business, financial position, operations, business prospects, customers, employees and third-party service providers;
|
•
|
the effect of the termination of the Agreement and Plan of Merger (the “Merger Agreement”) with BAF Holdings, LLC, a Delaware limited liability company (“Parent”), and BAF Sub, LLC, a Maryland limited liability company (“Merger Sub”) on our relationships with our customers, financing sources, third-party service providers, operating results and business generally;
|
•
|
the impact of the costs of the merger transaction that will be borne by the Company despite the merger transaction being terminated;
|
•
|
the effect of management’s attention being diverted from our ongoing business operations prior to the merger transaction being terminated;
|
•
|
the impact of defending any litigation associated with the termination of the merger transaction;
|
•
|
our ability to successfully implement our strategic initiatives and achieve their anticipated impact;
|
•
|
our ability to acquire single-family rental assets for our portfolio, including difficulties in identifying assets to acquire;
|
•
|
the impact of changes to the supply of, value of and the returns on single-family rental assets;
|
•
|
our ability to successfully integrate newly acquired properties into our portfolio of single-family rental properties;
|
•
|
our ability to successfully operate HavenBrook Partners, LLC (“HavenBrook”) as a property manager and perform property management services for our single-family rental assets at the standard and/or the cost that we anticipate;
|
•
|
our ability to predict our costs;
|
•
|
our ability to effectively compete with our competitors;
|
•
|
our ability to apply the proceeds from financing activities or non-rental real estate owned asset sales to target single-family rental assets in a timely manner;
|
•
|
our ability to sell non-rental real estate owned properties on favorable terms and on a timely basis or at all;
|
•
|
the failure to identify unforeseen expenses or material liabilities associated with asset acquisitions through the due diligence process prior to such acquisitions;
|
•
|
changes in the market value of our single-family rental properties and real estate owned;
|
•
|
changes in interest rates;
|
•
|
our ability to obtain and access financing arrangements on favorable terms or at all;
|
•
|
our ability to maintain adequate liquidity;
|
•
|
our ability to retain our engagement of AAMC;
|
•
|
the failure of our third party vendors to effectively perform their obligations under their respective agreements with us;
|
•
|
our failure to maintain our qualification as a REIT;
|
•
|
our failure to maintain our exemption from registration under the Investment Company Act;
|
•
|
the impact of adverse real estate, mortgage or housing markets;
|
•
|
the impact of adverse legislative, regulatory or tax changes; and
|
•
|
general economic and market conditions.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
|
(unaudited)
|
|
|
||||
Assets:
|
|
|
|
||||
Real estate held for use:
|
|
|
|
||||
Land
|
$
|
398,643
|
|
|
$
|
398,840
|
|
Rental residential properties
|
1,713,406
|
|
|
1,707,043
|
|
||
Real estate owned
|
12,147
|
|
|
16,328
|
|
||
Total real estate held for use
|
2,124,196
|
|
|
2,122,211
|
|
||
Less: accumulated depreciation
|
(224,985
|
)
|
|
(206,464
|
)
|
||
Total real estate held for use, net
|
1,899,211
|
|
|
1,915,747
|
|
||
Real estate assets held for sale
|
8,298
|
|
|
14,395
|
|
||
Cash and cash equivalents
|
32,299
|
|
|
43,727
|
|
||
Restricted cash
|
31,796
|
|
|
34,282
|
|
||
Accounts receivable
|
7,025
|
|
|
9,235
|
|
||
Goodwill
|
13,376
|
|
|
13,376
|
|
||
Prepaid expenses and other assets
|
21,485
|
|
|
22,360
|
|
||
Total assets
|
$
|
2,013,490
|
|
|
$
|
2,053,122
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Repurchase and loan agreements
|
$
|
1,637,466
|
|
|
$
|
1,644,230
|
|
Accounts payable and accrued liabilities
|
60,766
|
|
|
64,619
|
|
||
Payable to AAMC
|
4,140
|
|
|
5,014
|
|
||
Total liabilities
|
1,702,372
|
|
|
1,713,863
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 7)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common stock, $0.01 par value, 200,000,000 authorized shares; 54,112,374 shares issued and outstanding as of March 31, 2020 and 53,933,575 shares issued and outstanding as of December 31, 2019
|
541
|
|
|
539
|
|
||
Additional paid-in capital
|
1,190,018
|
|
|
1,189,236
|
|
||
Accumulated deficit
|
(859,080
|
)
|
|
(830,602
|
)
|
||
Accumulated other comprehensive loss
|
(20,361
|
)
|
|
(19,914
|
)
|
||
Total equity
|
311,118
|
|
|
339,259
|
|
||
Total liabilities and equity
|
$
|
2,013,490
|
|
|
$
|
2,053,122
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
||||
Rental revenues
|
$
|
54,328
|
|
|
$
|
52,625
|
|
Total revenues
|
54,328
|
|
|
52,625
|
|
||
Expenses:
|
|
|
|
||||
Residential property operating expenses
|
18,861
|
|
|
18,437
|
|
||
Property management expenses
|
4,171
|
|
|
3,675
|
|
||
Depreciation and amortization
|
20,366
|
|
|
22,385
|
|
||
Acquisition and integration costs
|
69
|
|
|
2,211
|
|
||
Impairment
|
235
|
|
|
1,020
|
|
||
Mortgage loan servicing costs
|
—
|
|
|
387
|
|
||
Interest expense
|
19,496
|
|
|
21,510
|
|
||
Share-based compensation
|
1,487
|
|
|
1,119
|
|
||
General and administrative
|
7,591
|
|
|
5,766
|
|
||
Management fees to AAMC
|
3,584
|
|
|
3,575
|
|
||
Total expenses
|
75,860
|
|
|
80,085
|
|
||
Net gain on real estate and mortgage loans
|
1,533
|
|
|
8,777
|
|
||
Operating loss
|
(19,999
|
)
|
|
(18,683
|
)
|
||
Casualty losses
|
(287
|
)
|
|
(393
|
)
|
||
Insurance recoveries
|
63
|
|
|
527
|
|
||
Other income
|
8
|
|
|
49
|
|
||
Loss before income taxes
|
(20,215
|
)
|
|
(18,500
|
)
|
||
Income tax expense
|
—
|
|
|
8
|
|
||
Net loss
|
$
|
(20,215
|
)
|
|
$
|
(18,508
|
)
|
|
|
|
|
|
|||
Loss per share of common stock - basic:
|
|
|
|
|
|||
Loss per basic share
|
$
|
(0.37
|
)
|
|
$
|
(0.35
|
)
|
Weighted average common stock outstanding - basic
|
53,943,434
|
|
|
53,630,204
|
|
||
Loss per share of common stock - diluted:
|
|
|
|
|
|
||
Loss per diluted share
|
$
|
(0.37
|
)
|
|
$
|
(0.35
|
)
|
Weighted average common stock outstanding - diluted
|
53,943,434
|
|
|
53,630,204
|
|
||
|
|
|
|
|
|
||
Dividends declared per common share
|
$
|
0.15
|
|
|
$
|
0.15
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net loss
|
$
|
(20,215
|
)
|
|
$
|
(18,508
|
)
|
|
|
|
|
||||
Other comprehensive loss:
|
|
|
|
||||
Change in fair value of interest rate caps
|
(1,815
|
)
|
|
(7,609
|
)
|
||
Losses from interest rate caps reclassified into earnings from accumulated other comprehensive loss
|
1,368
|
|
|
987
|
|
||
Net other comprehensive loss
|
(447
|
)
|
|
(6,622
|
)
|
||
|
|
|
|
||||
Comprehensive loss
|
$
|
(20,662
|
)
|
|
$
|
(25,130
|
)
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Comprehensive Loss
|
|
Total Equity
|
|||||||||||||
|
Number of Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
December 31, 2019
|
53,933,575
|
|
|
$
|
539
|
|
|
$
|
1,189,236
|
|
|
$
|
(830,602
|
)
|
|
$
|
(19,914
|
)
|
|
$
|
339,259
|
|
Common shares issued under share-based compensation plans
|
243,089
|
|
|
3
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||
Shares withheld for taxes upon vesting of restricted stock
|
(64,290
|
)
|
|
(1
|
)
|
|
(767
|
)
|
|
—
|
|
|
—
|
|
|
(768
|
)
|
|||||
Dividends on common stock ($0.15 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,263
|
)
|
|
—
|
|
|
(8,263
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1,487
|
|
|
—
|
|
|
—
|
|
|
1,487
|
|
|||||
Change in fair value of cash flow hedging derivatives in other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(447
|
)
|
|
(447
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,215
|
)
|
|
—
|
|
|
(20,215
|
)
|
|||||
March 31, 2020
|
54,112,374
|
|
|
$
|
541
|
|
|
$
|
1,190,018
|
|
|
$
|
(859,080
|
)
|
|
$
|
(20,361
|
)
|
|
$
|
311,118
|
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Comprehensive Loss
|
|
Total Equity
|
|||||||||||||
|
Number of Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
December 31, 2018
|
53,630,204
|
|
|
$
|
536
|
|
|
$
|
1,184,132
|
|
|
$
|
(700,623
|
)
|
|
$
|
(12,653
|
)
|
|
$
|
471,392
|
|
Adoption of ASC 842
|
—
|
|
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
96
|
|
|||||
Dividends on common stock ($0.15 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,158
|
)
|
|
—
|
|
|
(8,158
|
)
|
|||||
Share-based compensation
|
—
|
|
|
—
|
|
|
1,119
|
|
|
—
|
|
|
—
|
|
|
1,119
|
|
|||||
Change in fair value of cash flow hedging derivatives in other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,622
|
)
|
|
(6,622
|
)
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,508
|
)
|
|
—
|
|
|
(18,508
|
)
|
|||||
March 31, 2019
|
53,630,204
|
|
|
$
|
536
|
|
|
$
|
1,185,251
|
|
|
$
|
(727,193
|
)
|
|
$
|
(19,275
|
)
|
|
$
|
439,319
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(20,215
|
)
|
|
$
|
(18,508
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Net gain on real estate and mortgage loans
|
(1,533
|
)
|
|
(8,777
|
)
|
||
Depreciation and amortization
|
20,366
|
|
|
22,385
|
|
||
Impairment
|
235
|
|
|
1,020
|
|
||
Share-based compensation
|
1,487
|
|
|
1,119
|
|
||
Amortization of deferred financing costs
|
1,375
|
|
|
1,242
|
|
||
Casualty losses
|
287
|
|
|
393
|
|
||
Insurance recoveries
|
(63
|
)
|
|
(527
|
)
|
||
Change in fair value of interest rate cap derivatives in profit or loss
|
1,368
|
|
|
987
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
88
|
|
|
2,131
|
|
||
Deferred leasing costs
|
(806
|
)
|
|
(682
|
)
|
||
Prepaid expenses and other assets
|
(1,000
|
)
|
|
438
|
|
||
Accounts payable and accrued liabilities
|
(3,656
|
)
|
|
(8,951
|
)
|
||
Payable to AAMC
|
(874
|
)
|
|
(257
|
)
|
||
Net cash used in operating activities
|
(2,941
|
)
|
|
(7,987
|
)
|
||
Investing activities:
|
|
|
|
||||
Investment in real estate
|
(543
|
)
|
|
(1,830
|
)
|
||
Investment in renovations
|
(8,263
|
)
|
|
(6,615
|
)
|
||
Payment of real estate tax advances
|
—
|
|
|
(26
|
)
|
||
Proceeds from mortgage loan resolutions and dispositions
|
—
|
|
|
451
|
|
||
Receipt of mortgage loan payments
|
—
|
|
|
77
|
|
||
Proceeds from dispositions of real estate
|
15,025
|
|
|
114,905
|
|
||
Proceeds from casualty insurance
|
63
|
|
|
1,539
|
|
||
Net cash provided by investing activities
|
6,282
|
|
|
108,501
|
|
||
Financing activities:
|
|
|
|
||||
Proceeds from exercise of stock options
|
86
|
|
|
—
|
|
||
Payment of tax withholdings on share-based compensation plan awards
|
(21
|
)
|
|
—
|
|
||
Shares withheld for taxes upon vesting of restricted stock
|
(768
|
)
|
|
—
|
|
||
Dividends on common stock
|
(8,148
|
)
|
|
(8,045
|
)
|
||
Proceeds from repurchase and loan agreements
|
8,102
|
|
|
21,788
|
|
||
Repayments of repurchase and loan agreements
|
(15,867
|
)
|
|
(112,856
|
)
|
||
Payment of financing costs
|
(374
|
)
|
|
(414
|
)
|
||
Principal repayments of finance leases
|
(265
|
)
|
|
(175
|
)
|
||
Net cash (used in) provided by financing activities
|
(17,255
|
)
|
|
(99,702
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
(13,914
|
)
|
|
812
|
|
||
Cash, cash equivalents and restricted cash as of beginning of the period
|
78,009
|
|
|
81,160
|
|
||
Cash, cash equivalents and restricted cash as of end of the period
|
$
|
64,095
|
|
|
$
|
81,972
|
|
|
|
|
|
||||
|
|
|
|
Front Yard Residential Corporation
Condensed Consolidated Statements of Cash Flows (continued)
(In thousands)
(Unaudited)
|
|||||||
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for:
|
|
|
|
||||
Interest
|
$
|
17,266
|
|
|
$
|
19,939
|
|
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
||||
Transfer of mortgage loans to real estate owned, net
|
$
|
—
|
|
|
$
|
3,376
|
|
Changes in accrued capital expenditures
|
(273
|
)
|
|
(2,025
|
)
|
||
Changes in receivables from mortgage loan resolutions and dispositions, payments and real estate tax advances to borrowers, net
|
—
|
|
|
586
|
|
||
Changes in receivables from real estate owned dispositions
|
(2,144
|
)
|
|
10,364
|
|
||
Change in other comprehensive loss from cash flow hedges
|
(447
|
)
|
|
(6,622
|
)
|
||
Right-of-use lease assets recognized - operating leases
|
—
|
|
|
1,365
|
|
||
Right-of-use lease assets recognized - finance leases
|
226
|
|
|
893
|
|
||
Operating lease liabilities incurred
|
—
|
|
|
1,365
|
|
||
Finance lease liabilities incurred
|
226
|
|
|
893
|
|
||
Dividends declared but not paid
|
814
|
|
|
8,158
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Conversion of mortgage loans to REO, net
|
$
|
—
|
|
|
$
|
615
|
|
Change in fair value of mortgage loans, net
|
—
|
|
|
116
|
|
||
Net realized gain on mortgage loans
|
—
|
|
|
523
|
|
||
Net realized gain on sales of real estate
|
1,533
|
|
|
7,523
|
|
||
Net gain on real estate and mortgage loans
|
$
|
1,533
|
|
|
$
|
8,777
|
|
March 31, 2020
|
Held for Use
|
|
Held for Sale
|
|
Total Portfolio
|
|||
Rental Properties:
|
|
|
|
|
|
|||
Leased
|
14,010
|
|
|
—
|
|
|
14,010
|
|
Listed and ready for rent
|
234
|
|
|
—
|
|
|
234
|
|
Unit turn
|
205
|
|
|
—
|
|
|
205
|
|
Renovation
|
84
|
|
|
—
|
|
|
84
|
|
Total rental properties
|
14,533
|
|
|
|
|
|
||
Previous rentals identified for sale
|
76
|
|
|
48
|
|
|
124
|
|
Legacy REO
|
7
|
|
|
6
|
|
|
13
|
|
|
14,616
|
|
|
54
|
|
|
14,670
|
|
December 31, 2019
|
|
|
|
|
|
|||
Rental Properties:
|
|
|
|
|
|
|||
Leased
|
13,711
|
|
|
—
|
|
|
13,711
|
|
Listed and ready for rent
|
371
|
|
|
—
|
|
|
371
|
|
Unit turn
|
369
|
|
|
—
|
|
|
369
|
|
Renovation
|
94
|
|
|
—
|
|
|
94
|
|
Total rental properties
|
14,545
|
|
|
|
|
|
||
Previous rentals identified for sale
|
94
|
|
|
87
|
|
|
181
|
|
Legacy REO
|
10
|
|
|
12
|
|
|
22
|
|
|
14,649
|
|
|
99
|
|
|
14,748
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
|
Carrying Value
|
|
Quoted Prices in Active Markets
|
|
Observable Inputs Other Than Level 1 Prices
|
|
Unobservable Inputs
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Interest rate cap derivatives (1)
|
$
|
254
|
|
|
$
|
—
|
|
|
$
|
254
|
|
|
$
|
—
|
|
Not recognized on condensed consolidated balance sheets at fair value (liabilities)
|
|
|
|
|
|
|
|
||||||||
Repurchase and loan agreements
|
1,637,466
|
|
|
—
|
|
|
1,646,272
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
Recurring basis (assets)
|
|
|
|
|
|
|
|
||||||||
Interest rate cap derivatives (1)
|
$
|
2,070
|
|
|
$
|
—
|
|
|
$
|
2,070
|
|
|
$
|
—
|
|
Not recognized on consolidated balance sheets at fair value (liabilities)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Repurchase and loan agreements
|
1,644,230
|
|
|
—
|
|
|
1,653,720
|
|
|
—
|
|
(1)
|
Included within prepaid expenses and other assets in the condensed consolidated balance sheets.
|
|
Maturity Date
|
|
|
Interest Rate
|
|
|
Amount Outstanding
|
|
Maximum Borrowing Capacity
|
|
Amount of Available Funding
|
|
Book Value of Collateral
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
5/15/2020
|
(1)
|
|
1-month LIBOR + 2.30%
|
|
|
$
|
101,569
|
|
|
$
|
250,000
|
|
|
$
|
148,431
|
|
|
$
|
107,139
|
|
Nomura Loan Agreement
|
5/3/2020
|
(2)
|
|
1-month LIBOR + 2.30%
|
|
|
33,340
|
|
|
250,000
|
|
|
216,660
|
|
|
37,748
|
|
||||
HOME II Loan Agreement
|
11/9/2020
|
(3)
|
|
1-month LIBOR + 2.10%
|
(4)
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
97,528
|
|
||||
HOME III Loan Agreement
|
11/9/2020
|
(3)
|
|
1-month LIBOR + 2.10%
|
(4)
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
108,109
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
140,922
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
141,707
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
99,782
|
|
|
99,782
|
|
|
—
|
|
|
110,325
|
|
||||
FYR SFR Loan Agreement
|
9/1/2028
|
|
|
4.65%
|
|
|
508,700
|
|
|
508,700
|
|
|
—
|
|
|
570,918
|
|
||||
MS Loan Agreement
|
12/7/2023
|
|
|
1-month LIBOR + 1.80%
|
(5)
|
|
504,986
|
|
|
504,986
|
|
|
—
|
|
|
591,928
|
|
||||
|
|
|
|
|
|
|
1,649,588
|
|
|
$
|
2,014,679
|
|
|
$
|
365,091
|
|
|
$
|
1,906,324
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
(3,316
|
)
|
|
|
|
|
|
|
||||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
(8,806
|
)
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
$
|
1,637,466
|
|
|
|
|
|
|
|
||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
2/15/2020
|
|
|
1-month LIBOR + 2.30%
|
|
|
$
|
109,002
|
|
|
$
|
250,000
|
|
|
$
|
140,998
|
|
|
$
|
111,593
|
|
Nomura Loan Agreement
|
4/5/2020
|
|
|
1-month LIBOR + 2.30%
|
|
|
33,671
|
|
|
250,000
|
|
|
216,329
|
|
|
38,423
|
|
||||
HOME II Loan Agreement
|
11/9/2020
|
|
|
1-month LIBOR + 2.10%
|
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
98,150
|
|
||||
HOME III Loan Agreement
|
11/9/2020
|
|
|
1-month LIBOR + 2.10%
|
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
108,860
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
141,787
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
142,620
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
99,782
|
|
|
99,782
|
|
|
—
|
|
|
111,061
|
|
||||
FYR SFR Loan Agreement
|
9/1/2028
|
|
|
4.65%
|
|
|
508,700
|
|
|
508,700
|
|
|
—
|
|
|
573,961
|
|
||||
MS Loan Agreement
|
12/7/2023
|
|
|
1-month LIBOR + 1.80%
|
|
|
504,986
|
|
|
504,986
|
|
|
—
|
|
|
595,650
|
|
||||
|
|
|
|
|
|
|
1,657,352
|
|
|
$
|
2,014,679
|
|
|
$
|
357,327
|
|
|
$
|
1,922,105
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
(3,632
|
)
|
|
|
|
|
|
|
||||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
(9,490
|
)
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
$
|
1,644,230
|
|
|
|
|
|
|
|
(1)
|
On April 30, 2020, we renewed the CS Repurchase Agreement until June 30, 2020 with an interest rate of 5.00% plus 1-Month LIBOR.
|
(2)
|
On May 1, 2020, we refinanced the assets serving as collateral under the Nomura Loan Agreement under the CS Repurchase Agreement, and the Nomura Loan Agreement was terminated and repaid in full.
|
(3)
|
Represents initial maturity date. We have the option to extend the maturity date for up to three successive one-year extensions, the first of which we exercised on October 17, 2019.
|
(4)
|
The interest rate is capped at 4.40% under an interest rate cap derivative. See Note 10.
|
(5)
|
The interest rate is capped at 4.30% under an interest rate cap derivative. See Note 10.
|
•
|
In connection with the seller financing related to an acquisition of SFR properties on March 30, 2017, our wholly owned subsidiary, HOME SFR Borrower II, LLC (“HOME Borrower II”), entered into the HOME II Loan Agreement with entities sponsored by Amherst Holdings, LLC (“Amherst”). On November 13, 2017, HOME Borrower II entered into an amended and restated loan agreement, which was acquired by Metropolitan Life Insurance Company (“MetLife”). HOME Borrower II has the option to extend the HOME II Loan Agreement beyond the initial maturity date for three successive one-year extensions, provided, among other things, that there is no event of default under the HOME II Loan Agreement on each maturity date. The HOME II Loan Agreement is cross-defaulted and cross-collateralized with the HOME III Loan Agreement.
|
•
|
In connection with the seller financing related to an acquisition of SFR properties on June 29, 2017, our wholly owned subsidiary, HOME SFR Borrower III, LLC (“HOME Borrower III”), entered into the HOME III Loan Agreement with entities sponsored by Amherst. On November 13, 2017, HOME Borrower III entered into an amended and restated loan agreement, which was acquired by MetLife. HOME Borrower III has the option to extend the HOME III Loan Agreement beyond the initial maturity date for three successive one-year extensions, provided, among other things, that there is no event of default under the HOME III Loan Agreement on each maturity date. The HOME III Loan Agreement is also cross-defaulted and cross-collateralized with the HOME II Loan Agreement.
|
•
|
In connection with the seller financing related to an acquisition of SFR properties on November 29, 2017, our wholly owned subsidiary, HOME SFR Borrower IV, LLC (“HOME Borrower IV”), entered into two separate loan agreements
|
•
|
reporting requirements to the agent or lender,
|
•
|
minimum adjusted tangible net worth requirements,
|
•
|
minimum net asset requirements,
|
•
|
limitations on the indebtedness,
|
•
|
minimum levels of liquidity, including specified levels of unrestricted cash,
|
•
|
limitations on sales and dispositions of properties collateralizing certain of the loan agreements,
|
•
|
various restrictions on the use of cash generated by the operations of properties, and
|
•
|
a minimum fixed charge coverage ratio.
|
2020 (1)
|
$
|
97,459
|
|
2021
|
13,498
|
|
|
2022
|
563
|
|
|
2023
|
12
|
|
|
2024
|
—
|
|
|
Thereafter
|
—
|
|
|
|
$
|
111,532
|
|
(1)
|
Excludes the three months ended March 31, 2020.
|
(1)
|
Excludes the three months ended March 31, 2020.
|
|
Finance Lease Liabilities
|
||
2020 (1)
|
$
|
995
|
|
2021
|
849
|
|
|
2022
|
315
|
|
|
2023
|
83
|
|
|
2024
|
13
|
|
|
Thereafter
|
—
|
|
|
Total lease payments
|
2,255
|
|
|
Less: interest
|
194
|
|
|
Lease liabilities
|
$
|
2,061
|
|
(1)
|
Excludes the three months ended March 31, 2020.
|
•
|
Base Management Fee. Front Yard will pay a quarterly base management fee (the “Base Management Fee”) to AAMC as follows:
|
◦
|
Initially, commencing on the Effective Date and until the Reset Date (as defined below), the quarterly Base Management Fee will be (i) $3,584,000 (the “Minimum Base Fee”) plus (ii) an additional amount (the “Additional Base Fee”), if any, of 50% of the amount by which Front Yard's per share Adjusted AFFO (as defined in the Amended AMA) for the quarter exceeds $0.15 per share (provided that the Base Management Fee for any calendar quarter prior to the Reset Date cannot be less than the Minimum Base Fee or greater than $5,250,000). Beginning in 2021, the Base Management Fee may be reduced, but not below the Minimum Base Fee, in the fourth quarter of each year by the amount that Front Yard's AFFO (as defined below) on a per share basis is less than an aggregate of $0.60 for the applicable calendar year (the “AFFO Adjustment Amount”); and
|
◦
|
Thereafter, commencing in the first quarter after which the quarterly Base Management Fee first reaches $5,250,000 (the “Reset Date”), the Base Management Fee will be 25% of the sum of (i) the applicable Annual Base Fee Floor plus (ii) the amount calculated by multiplying the applicable Manager Base Fee Percentage by the amount, if any, that Front Yard's Gross Real Estate Assets (as defined below) exceeds the applicable Gross Real Estate Assets Floor (in each case of the foregoing clauses (i) and (ii), as set forth in the table below), minus (iii) solely in the case of the fourth quarter of a calendar year, the AFFO Adjustment Amount (if any); provided, that the Base Management Fee for any calendar quarter shall not be less than the Minimum Base Fee.
|
Gross Real Estate Assets (1)
|
|
Annual Base Fee Floor
|
|
Manager Base Fee Percentage
|
|
Gross Real Estate Assets Floor
|
Up to $2,750,000,000
|
|
$21,000,000
|
|
0.325%
|
|
$2,250,000,000
|
$2,750,000,000 – $3,250,000,000
|
|
$22,625,000
|
|
0.275%
|
|
$2,750,000,000
|
$3,250,000,000 – $4,000,000,000
|
|
$24,000,000
|
|
0.250%
|
|
$3,250,000,000
|
$4,000,000,000 – $5,000,000,000
|
|
$25,875,000
|
|
0.175%
|
|
$4,000,000,000
|
$5,000,000,000 – $6,000,000,000
|
|
$27,625,000
|
|
0.125%
|
|
$5,000,000,000
|
$6,000,000,000 – $7,000,000,000
|
|
$28,875,000
|
|
0.100%
|
|
$6,000,000,000
|
Thereafter
|
|
$29,875,000
|
|
0.050%
|
|
$7,000,000,000
|
(1)
|
Gross Real Estate Assets is generally defined as the aggregate book value of all residential real estate assets owned by Front Yard and its subsidiaries before reserves for depreciation, impairment or other non-cash reserves as computed in accordance with GAAP.
|
•
|
Incentive Fee. AAMC may earn an annual Incentive Fee to the extent that Front Yard's AFFO exceeds certain performance thresholds. The annual Incentive Fee, if any, shall be an amount equal to 20% of the amount by which Front Yard's AFFO for the calendar year (after the deduction of Base Management Fees but prior to the deduction of Incentive Fees) exceeds 5% of Gross Shareholder Equity (as defined below).
|
•
|
For any calendar year in which average Gross Real Estate Assets is less than $2,250,000,000, the aggregate fees payable to AAMC shall not exceed $21,000,000; or
|
•
|
For any calendar year in which average Gross Real Estate Assets exceeds $2,250,000,000, the aggregate fees payable to AAMC shall not exceed the sum of (i) the applicable Aggregate Fee Floor plus (ii) the amount calculated by multiplying the applicable Aggregate Fee Percentage by the amount, if any, by which average Gross Real Estate Assets exceed the applicable Gross Real Estate Assets Floor, in each case as set forth in the table below.
|
Gross Real Estate Assets
|
|
Aggregate Fee Floor
|
|
Aggregate Fee Percentage
|
|
Gross Real Estate Assets Floor
|
$2,250,000,000 – $2,750,000,000
|
|
$21,000,000
|
|
0.650%
|
|
$2,250,000,000
|
$2,750,000,000 – $3,250,000,000
|
|
$24,250,000
|
|
0.600%
|
|
$2,750,000,000
|
$3,250,000,000 – $4,000,000,000
|
|
$27,250,000
|
|
0.500%
|
|
$3,250,000,000
|
$4,000,000,000 – $5,000,000,000
|
|
$31,000,000
|
|
0.450%
|
|
$4,000,000,000
|
$5,000,000,000 – $6,000,000,000
|
|
$35,500,000
|
|
0.250%
|
|
$5,000,000,000
|
$6,000,000,000 – $7,000,000,000
|
|
$38,000,000
|
|
0.125%
|
|
$6,000,000,000
|
Thereafter
|
|
$39,250,000
|
|
0.100%
|
|
$7,000,000,000
|
•
|
Base Management Fee. AAMC was entitled to a quarterly base management fee equal to 1.5% of the product of (i) our average invested capital (as defined in the Former AMA) for the quarter multiplied by (ii) 0.25, while we had fewer than 2,500 SFR properties actually rented (“Rental Properties”). The base management fee percentage increased to 1.75% of invested capital while we had between 2,500 and 4,499 Rental Properties and increased to 2.0% of invested capital while we had 4,500 or more Rental Properties;
|
•
|
Incentive Management Fee. AAMC was entitled to a quarterly incentive management fee equal to 20% of the amount by which our return on invested capital (based on AFFO defined as our net income attributable to holders of common stock calculated in accordance with GAAP plus real estate depreciation expense minus recurring capital expenditures on all of our real estate assets owned) exceeded an annual hurdle return rate of between 7.0% and 8.25% (or 1.75% and 2.06% per quarter), depending on the 10-year treasury rate. To the extent that we had an aggregate shortfall in the return rate over the previous seven quarters, that aggregate return rate shortfall was added to the normal quarterly return hurdle for the next quarter before AAMC was entitled to an incentive management fee. The incentive management fee increased to 22.5% while we had between 2,500 and 4,499 Rental Properties and increased to 25% while we had 4,500 or more Rental Properties. No incentive management fee under the Former AMA has been payable to AAMC because our return on invested capital (as defined in the Former AMA) did not exceed the cumulative required hurdle rate; and
|
•
|
Conversion Fee. AAMC was entitled to a quarterly conversion fee equal to 1.5% of the market value of the SFR homes leased by us for the first time during the applicable quarter.
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Base management fees (1)
|
$
|
3,584
|
|
|
$
|
3,546
|
|
Conversion fees (1)
|
—
|
|
|
29
|
|
||
Expense reimbursements (2)
|
368
|
|
|
328
|
|
(1)
|
Included in management fees to AAMC in the condensed consolidated statements of operations.
|
(2)
|
Included in general and administrative expenses in the condensed consolidated statements of operations.
|
Effective Date
|
|
Termination Date
|
|
Strike Rate
|
|
Benchmark Rate
|
|
Notional Amount
|
||
November 2, 2018
|
|
May 9, 2024
|
|
2.50%
|
|
One-month LIBOR
|
|
$
|
505,000
|
|
October 16, 2018
|
|
October 15, 2022
|
|
2.30%
|
|
One-month LIBOR
|
|
83,270
|
|
|
October 16, 2018
|
|
October 15, 2022
|
|
2.30%
|
|
One-month LIBOR
|
|
89,149
|
|
|
|
Asset Derivatives
|
||||||||
|
|
Balance Sheet Location
|
|
Fair Value as of
|
||||||
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest rate caps
|
|
Prepaid expenses and other assets
|
|
$
|
254
|
|
|
$
|
2,070
|
|
Total
|
|
|
|
$
|
254
|
|
|
$
|
2,070
|
|
|
|
Amount of Gain (Loss) Recognized in OCI on Derivative (effective portion)
|
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Net Loss
|
|
Amount of Gain (Loss) Reclassified from Accumulated OCI into Net Loss (effective portion)
|
|
Total Amount of Interest Expense Presented in the Condensed Consolidated Statements of Operations
|
||||||||||||||||||
|
|
Three Months ended March 31,
|
|
|
Three Months ended March 31,
|
|
Three Months ended March 31,
|
|||||||||||||||||||
|
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|||||||||||||
Derivatives in cash flow hedging relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate caps
|
|
$
|
(1,815
|
)
|
|
$
|
(7,609
|
)
|
|
Interest expense
|
|
$
|
(1,368
|
)
|
|
$
|
(987
|
)
|
|
$
|
19,496
|
|
|
$
|
21,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Numerator
|
|
|
|
||||
Net loss
|
$
|
(20,215
|
)
|
|
$
|
(18,508
|
)
|
|
|
|
|
||||
Denominator
|
|
|
|
||||
Weighted average common stock outstanding – basic
|
53,943,434
|
|
|
53,630,204
|
|
||
Weighted average common stock outstanding – diluted
|
53,943,434
|
|
|
53,630,204
|
|
||
|
|
|
|
||||
Loss per basic common share
|
$
|
(0.37
|
)
|
|
$
|
(0.35
|
)
|
Loss per diluted common share
|
$
|
(0.37
|
)
|
|
$
|
(0.35
|
)
|
|
Three months ended March 31,
|
||||
|
2020
|
|
2019
|
||
Denominator (in weighted-average shares)
|
|
|
|
||
Stock options
|
99,377
|
|
|
47,949
|
|
Restricted stock
|
820,539
|
|
|
321,637
|
|
|
Held for Use
|
|
Held for Sale
|
|
Total Portfolio
|
|||||||||
March 31, 2020
|
Stabilized
|
|
Non-Stabilized
|
|
Total
|
|
|
|||||||
Rental properties:
|
|
|
|
|
|
|
|
|
|
|||||
Leased
|
14,010
|
|
|
—
|
|
|
14,010
|
|
|
—
|
|
|
14,010
|
|
Listed and ready for rent
|
227
|
|
|
7
|
|
|
234
|
|
|
—
|
|
|
234
|
|
Unit turn
|
205
|
|
|
—
|
|
|
205
|
|
|
—
|
|
|
205
|
|
Renovation
|
—
|
|
|
84
|
|
|
84
|
|
|
—
|
|
|
84
|
|
Total rental portfolio
|
14,442
|
|
|
91
|
|
|
14,533
|
|
|
|
|
|
||
Previous rentals identified for sale
|
—
|
|
|
76
|
|
|
76
|
|
|
48
|
|
|
124
|
|
Legacy REO
|
—
|
|
|
7
|
|
|
7
|
|
|
6
|
|
|
13
|
|
|
14,442
|
|
|
174
|
|
|
14,616
|
|
|
54
|
|
|
14,670
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|||||
Rental properties:
|
|
|
|
|
|
|
|
|
|
|||||
Leased
|
13,711
|
|
|
—
|
|
|
13,711
|
|
|
—
|
|
|
13,711
|
|
Listed and ready for rent
|
357
|
|
|
14
|
|
|
371
|
|
|
—
|
|
|
371
|
|
Unit turn
|
369
|
|
|
—
|
|
|
369
|
|
|
—
|
|
|
369
|
|
Renovation
|
—
|
|
|
94
|
|
|
94
|
|
|
—
|
|
|
94
|
|
Total rental portfolio
|
14,437
|
|
|
108
|
|
|
14,545
|
|
|
|
|
|
||
Previous rentals identified for sale
|
—
|
|
|
94
|
|
|
94
|
|
|
87
|
|
|
181
|
|
Legacy REO
|
—
|
|
|
10
|
|
|
10
|
|
|
12
|
|
|
22
|
|
|
14,437
|
|
|
212
|
|
|
14,649
|
|
|
99
|
|
|
14,748
|
|
State
|
|
Number of Properties
|
|
Carrying Value (1)
|
|
Average Age in Years
|
||||
Georgia
|
|
4,377
|
|
|
$
|
471,229
|
|
|
37
|
|
Florida
|
|
2,083
|
|
|
301,994
|
|
|
41
|
|
|
Texas
|
|
1,929
|
|
|
273,822
|
|
|
30
|
|
|
Tennessee
|
|
1,468
|
|
|
202,539
|
|
|
25
|
|
|
North Carolina
|
|
867
|
|
|
113,948
|
|
|
27
|
|
|
Alabama
|
|
720
|
|
|
79,644
|
|
|
43
|
|
|
Indiana
|
|
664
|
|
|
81,653
|
|
|
25
|
|
|
Minnesota
|
|
623
|
|
|
106,176
|
|
|
79
|
|
|
Missouri
|
|
484
|
|
|
67,665
|
|
|
43
|
|
|
Oklahoma
|
|
305
|
|
|
42,471
|
|
|
29
|
|
|
All other rentals
|
|
1,013
|
|
|
147,182
|
|
|
36
|
|
|
Total rental portfolio
|
|
14,533
|
|
|
1,888,323
|
|
|
37
|
|
|
Rental properties held for sale
|
|
48
|
|
|
6,622
|
|
|
54
|
|
|
Previous rentals identified for sale
|
|
76
|
|
|
8,825
|
|
|
49
|
|
|
Legacy REO
|
|
13
|
|
|
3,739
|
|
|
56
|
|
|
Total
|
|
14,670
|
|
|
$
|
1,907,509
|
|
|
37
|
|
(1)
|
The carrying value of an asset held for use is based on historical cost, plus renovation costs, net of any accumulated depreciation and impairment. Assets held for sale are carried at the lower of the carrying amount or estimated fair value less costs to sell.
|
|
Three months ended March 31,
|
||||
|
2020
|
|
2019
|
||
Beginning count of real estate assets
|
14,748
|
|
|
15,445
|
|
Acquisitions
|
4
|
|
|
14
|
|
Dispositions
|
(82
|
)
|
|
(576
|
)
|
Other additions
|
—
|
|
|
2
|
|
Ending count of real estate assets
|
14,670
|
|
|
14,885
|
|
|
Three months ended March 31, 2019
|
|
Mortgage Loans at Fair Value
|
|
|
Beginning
|
74
|
|
Resolutions and dispositions
|
(8
|
)
|
Ending
|
66
|
|
i.
|
Residential property operating expenses. Residential property operating expenses are expenses associated with our ownership and operation of residential properties, including expenses towards repairs, turnover costs, utility expenses on vacant properties, property taxes, insurance, HOA dues and personnel cost for repair and maintenance employees.
|
ii.
|
Property management expenses. Property management expenses include personnel costs of property management employees and other costs incurred in the oversight and management of our portfolio of homes.
|
iii.
|
Depreciation and amortization. Depreciation and amortization is a non-cash expense associated with the ownership of real estate and generally remains consistent over the life of an asset since we depreciate our properties on a straight-line basis. Depreciation and amortization also includes the amortization of our in-place lease intangible assets and lease commissions, which generally are amortized for periods of one year or less. The level of amortization of in-place lease intangible assets will vary depending upon our acquisition activity.
|
iv.
|
Acquisition and integration costs. Acquisition and integration costs include expenses associated with acquisitions as well as duplicative or non-recurring costs associated with the internalization of our property management function. We expect the majority of our asset acquisitions will not meet the definition of a business; therefore, we expect that the majority of acquisition costs will be capitalized into the cost basis of such assets.
|
v.
|
Impairment. Impairment represents the amount by which we estimate the carrying amount of a property will not be recoverable.
|
vi.
|
Mortgage loan servicing costs. Mortgage loan servicing costs were primarily for servicing fees, foreclosure fees and advances of residential property insurance. Due to our liquidation of the last of our remaining mortgage loans during the fourth quarter of 2019, we do not expect to incur mortgage loan servicing costs in future periods.
|
vii.
|
Interest expense. Interest expense consists of the costs to borrow money in connection with our debt financing of our portfolios.
|
viii.
|
Share-based compensation. Share-based compensation is a non-cash expense related to the restricted stock units and stock options issued pursuant to our authorized share-based compensation plans.
|
ix.
|
General and administrative. General and administrative expenses consist of the costs related to the general operation and overall administration of our business, including compensation and benefits of certain employees. In addition, general administrative expenses include expense reimbursements to AAMC, which include the compensation and benefits of the General Counsel dedicated to us and, beginning in January 2020, four specified employees who provide direct property management services to Front Yard as well as certain out-of-pocket expenses incurred by AAMC on our behalf.
|
x.
|
Management fees to AAMC. Under the Amended AMA, our management fees to AAMC include a quarterly Base Management Fee and a potential annual Incentive Fee, each of which are dependent upon our performance and are subject to potential downward adjustments and an aggregate fee cap. Beginning in the third quarter of 2019, the quarterly Base Management Fee under the Amended AMA is subject to a minimum of $3,584,000. Under the Former AMA, our management fees to AAMC included a base management fee and a conversion fee. The base management fee was calculated as a percentage of our average invested capital, and the conversion fee was based on the number and value of mortgage loans and/or REO properties that Front Yard converted to rental properties for the first time in each period. For information regarding our management fees to AAMC, refer to Item 1 - Financial Statements (Unaudited) - Note 8, “Related-Party Transactions.”
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Conversion of mortgage loans to REO, net
|
$
|
—
|
|
|
$
|
615
|
|
Change in fair value of mortgage loans, net
|
—
|
|
|
116
|
|
||
Net realized gain on mortgage loans
|
—
|
|
|
523
|
|
||
Net realized gain on sales of real estate
|
1,533
|
|
|
7,523
|
|
||
Net gain on real estate and mortgage loans
|
$
|
1,533
|
|
|
$
|
8,777
|
|
|
Maturity Date
|
|
|
Interest Rate
|
|
|
Amount Outstanding
|
|
Maximum Borrowing Capacity
|
|
Amount of Available Funding
|
|
Book Value of Collateral
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
5/15/2020
|
(1)
|
|
1-month LIBOR + 2.30%
|
|
|
$
|
101,569
|
|
|
$
|
250,000
|
|
|
$
|
148,431
|
|
|
$
|
107,139
|
|
Nomura Loan Agreement
|
5/3/2020
|
(2)
|
|
1-month LIBOR + 2.30%
|
|
|
33,340
|
|
|
250,000
|
|
|
216,660
|
|
|
37,748
|
|
||||
HOME II Loan Agreement
|
11/9/2020
|
(3)
|
|
1-month LIBOR + 2.10%
|
(4)
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
97,528
|
|
||||
HOME III Loan Agreement
|
11/9/2020
|
(3)
|
|
1-month LIBOR + 2.10%
|
(4)
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
108,109
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
140,922
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
141,707
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
99,782
|
|
|
99,782
|
|
|
—
|
|
|
110,325
|
|
||||
FYR SFR Loan Agreement
|
9/1/2028
|
|
|
4.65%
|
|
|
508,700
|
|
|
508,700
|
|
|
—
|
|
|
570,918
|
|
||||
MS Loan Agreement
|
12/7/2023
|
|
|
1-month LIBOR + 1.80%
|
(5)
|
|
504,986
|
|
|
504,986
|
|
|
—
|
|
|
591,928
|
|
||||
|
|
|
|
|
|
|
1,649,588
|
|
|
$
|
2,014,679
|
|
|
$
|
365,091
|
|
|
$
|
1,906,324
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
|
(3,316
|
)
|
|
|
|
|
|
|
|||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
|
(8,806
|
)
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
$
|
1,637,466
|
|
|
|
|
|
|
|
||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
CS Repurchase Agreement
|
2/15/2020
|
|
|
1-month LIBOR + 2.30%
|
|
|
$
|
109,002
|
|
|
$
|
250,000
|
|
|
$
|
140,998
|
|
|
$
|
111,593
|
|
Nomura Loan Agreement
|
4/5/2020
|
|
|
1-month LIBOR + 2.30%
|
|
|
33,671
|
|
|
250,000
|
|
|
216,329
|
|
|
38,423
|
|
||||
HOME II Loan Agreement
|
11/9/2020
|
|
|
1-month LIBOR + 2.10%
|
|
|
83,270
|
|
|
83,270
|
|
|
—
|
|
|
98,150
|
|
||||
HOME III Loan Agreement
|
11/9/2020
|
|
|
1-month LIBOR + 2.10%
|
|
|
89,150
|
|
|
89,150
|
|
|
—
|
|
|
108,860
|
|
||||
HOME IV Loan Agreement (A)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,201
|
|
|
114,201
|
|
|
—
|
|
|
141,787
|
|
||||
HOME IV Loan Agreement (B)
|
12/9/2022
|
|
|
4.00%
|
|
|
114,590
|
|
|
114,590
|
|
|
—
|
|
|
142,620
|
|
||||
Term Loan Agreement
|
4/6/2022
|
|
|
5.00%
|
|
|
99,782
|
|
|
99,782
|
|
|
—
|
|
|
111,061
|
|
||||
FYR SFR Loan Agreement
|
9/1/2028
|
|
|
4.65%
|
|
|
508,700
|
|
|
508,700
|
|
|
—
|
|
|
573,961
|
|
||||
MS Loan Agreement
|
12/7/2023
|
|
|
1-month LIBOR + 1.80%
|
|
|
504,986
|
|
|
504,986
|
|
|
—
|
|
|
595,650
|
|
||||
|
|
|
|
|
|
|
1,657,352
|
|
|
$
|
2,014,679
|
|
|
$
|
357,327
|
|
|
$
|
1,922,105
|
|
|
Less: unamortized loan discounts
|
|
|
|
|
|
|
(3,632
|
)
|
|
|
|
|
|
|
|||||||
Less: deferred debt issuance costs
|
|
|
|
|
|
|
(9,490
|
)
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
$
|
1,644,230
|
|
|
|
|
|
|
|
(1)
|
On April 30, 2020, we renewed the CS Repurchase Agreement until June 30, 2020 with an interest rate of 5% plus 1-Month LIBOR.
|
(2)
|
On May 1, 2020, we refinanced the assets serving as collateral under the Nomura Loan Agreement under the CS Repurchase Agreement, and the Nomura Loan Agreement was terminated and repaid in full.
|
(3)
|
Represents initial maturity date. We have the option to extend the maturity date for up to three successive one-year extensions, the first of which we exercised on October 17, 2019.
|
(4)
|
The interest rate is capped at 4.40% under an interest rate cap derivative.
|
(5)
|
The interest rate is capped at 4.30% under an interest rate cap derivative.
|
•
|
reporting requirements to the agent or lender,
|
•
|
minimum adjusted tangible net worth requirements,
|
•
|
minimum net asset requirements,
|
•
|
limitations on the indebtedness,
|
•
|
minimum levels of liquidity, including specified levels of unrestricted cash,
|
•
|
limitations on sales and dispositions of properties collateralizing certain of the loan agreements,
|
•
|
various restrictions on the use of cash generated by the operations of properties, and
|
•
|
a minimum fixed charge coverage ratio.
|
|
Three Months Ended
|
||||||||||
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2019
|
||||||
Balance at end of period
|
$
|
1,649,588
|
|
|
$
|
1,657,352
|
|
|
$
|
1,647,979
|
|
Maximum month end balance outstanding during the period
|
1,657,596
|
|
|
1,660,381
|
|
|
1,743,383
|
|
|||
Weighted average quarterly balance
|
1,655,343
|
|
|
1,645,609
|
|
|
1,687,266
|
|
|||
Amount of available funding at end of period
|
365,091
|
|
|
357,327
|
|
|
366,700
|
|
|
Three months ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash used in operating activities
|
$
|
(2,941
|
)
|
|
$
|
(7,987
|
)
|
Net cash provided by investing activities
|
6,282
|
|
|
108,501
|
|
||
Net cash used in by financing activities
|
(17,255
|
)
|
|
(99,702
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
$
|
(13,914
|
)
|
|
$
|
812
|
|
•
|
the reduced economic activity impacting our tenants' businesses and employers, which may have a material adverse effect on our tenant's financial condition and liquidity and may cause a portion of our tenants to be unable to pay their rent to us in full, or at all, or to otherwise seek rental concessions or modifications of their rent obligations;
|
•
|
difficulty finding suitable replacement tenants in the event of a tenant default or non-renewal of our leases;
|
•
|
reduced economic activity that could result in a prolonged recession, which could negatively impact the real estate industry, resulting in declining demand for real estate, which may affect our ability to sell any of our properties at a profit, or at all, in the future;
|
•
|
the general decline in business activity and demand for real estate transactions, which has adversely affected, and is likely to continue affecting, our ability to acquire additional properties;
|
•
|
the negative effects of the COVID-19 pandemic could impair our ability to make distributions to our stockholders;
|
•
|
any inability to comply with covenants under our debt agreements, which could result in a default under the applicable debt agreement and could trigger a cross-default under other indebtedness, which could cause an acceleration of our indebtedness or negatively impact our ability to incur additional indebtedness;
|
•
|
any impairment in value of our tangible or intangible assets, which could be recorded as a result of a weaker economic conditions; and
|
•
|
the potential negative impact on the health of our personnel, particularly if a significant number of them are impacted, could impair our ability to perform critical functions and may cause a disruption in our business operations.
|
Exhibit Number
|
|
Description
|
|
Separation Agreement, dated as of December 21, 2012, between Front Yard Residential Corporation and Altisource Portfolio Solutions S.A. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the SEC on December 28, 2012).
|
|
|
Membership Interest Purchase and Sale Agreement, dated September 30, 2016, between MSR I, LP and Front Yard Residential, L.P. (incorporated by reference to Exhibit 2.1 of the registrant's Current Report on Form 8-K filed with the SEC on October 3, 2016).
|
|
|
Purchase and Sale Agreement, dated September 30, 2016, between Firebird SFE I, LLC and Front Yard Residential, L.P. (incorporated by reference to Exhibit 2.2 of the registrant's Current Report on Form 8-K filed with the SEC on October 3, 2016).
|
|
|
Purchase and Sale Agreement, dated March 30, 2017, among Vaca Morada Partners, LP, MSR II, LP and Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on April 5, 2017).
|
|
|
First Amendment to the Purchase and Sale Agreement, dated June 29, 2017, among Vaca Morada Partners, LP, MSR II, LP and Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on July 6, 2017).
|
|
|
Second Amendment to the Purchase and Sale Agreement, dated November 29, 2017, among Vaca Morada Partners, LP, MSR II, LP and Front Yard Residential, L.P. f/k/a Altisource Residential, L.P. (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on December 5, 2017).
|
|
|
Purchase Agreement, dated August 8, 2018, by and among FYR SFR Purchaser, LLC, RHA 1 Inc., RHA 2 Inc., RHA 3 Inc., HavenBrook Partners, LLC, Rental Home Associates LLC and each of the unitholders of HavenBrook identified therein (incorporated by reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed with the SEC on August 9, 2018).†
|
|
|
Articles of Restatement of Front Yard Residential Corporation (incorporated by reference to Exhibit 3.3 of the registrant's Current Report on Form 8-K filed with the SEC on April 8, 2013).
|
|
|
Articles of Amendment of Front Yard Residential Corporation (incorporated by reference to Exhibit 3.1 of the registrant's Current Report on Form 8-K filed on February 9, 2018).
|
|
|
Amended and Restated By-laws of Front Yard Residential Corporation (incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed with the Commission on February 9, 2018).
|
|
31.1*
|
|
Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
31.2*
|
|
Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act
|
32.1*
|
|
Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
32.2*
|
|
Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Extension Labels Linkbase
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
Front Yard Residential Corporation
|
Date:
|
May 11, 2020
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|
Date:
|
May 11, 2020
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
May 11, 2020
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|
Date:
|
May 11, 2020
|
By:
|
/s/
|
George G. Ellison
|
|
|
|
|
George G. Ellison
|
|
|
|
|
Chief Executive Officer
|
Date:
|
May 11, 2020
|
By:
|
/s/
|
Robin N. Lowe
|
|
|
|
|
Robin N. Lowe
|
|
|
|
|
Chief Financial Officer
|