UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 25, 2017
PennyMac Mortgage Investment Trust
(Exact name of registrant as specified in its charter)
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Maryland |
001-34416 |
27-0186273 |
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(State or other jurisdiction |
(Commission |
(IRS Employer |
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of incorporation) |
File Number) |
Identification No.) |
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3043 Townsgate Road, Westlake Village, California |
91361 |
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(Address of principal executive offices) |
(Zip Code) |
(818) 224‑7442
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Repurchase Agreement
On August 28, 2017, PennyMac Mortgage Investment Trust (the “Company”), through two of its wholly-owned subsidiaries, PennyMac Corp. (“PMC”) and PennyMac Operating Partnership, LP (“POP”), entered into an amendment (the “Amendment”) to its Master Repurchase Agreement, dated as of November 20, 2012, by and among Morgan Stanley Bank, N.A., as buyer (“Morgan Stanley”), Morgan Stanley Mortgage Capital Holdings LLC, as agent, and PMC, as the original seller (the “Repurchase Agreement”). Pursuant to the terms of the Repurchase Agreement, PMC and/or POP may sell, and later repurchase, newly originated mortgage loans that PMC acquires from correspondent lenders pending sale and/or securitization. The obligations of PMC and POP under the Repurchase Agreement are fully guaranteed by the Company and the mortgage loans are serviced by PennyMac Loan Services, LLC, an indirect controlled subsidiary of PennyMac Financial Services, Inc. (NYSE: PFSI).
Under the terms of the Amendment, the maximum aggregate purchase price provided for in the Repurchase Agreement was decreased from $600 million to $500 million, the uncommitted amount of which was decreased from $350 million to $250 million. In addition, the termination date for the Repurchase Agreement was extended to August 24, 2018. The Amendment also requires the Company to maintain profitability, generated over a consecutive three-month period, of no less than $1.00 for two or more consecutive fiscal quarters, as of the last day of each fiscal quarter.
All other terms and conditions of the Repurchase Agreement, including the $250 million committed amount thereunder, remain the same in all material respects. The Company, through PMC and POP, is required to pay Morgan Stanley all fees and out-of-pocket expenses associated with the preparation of the Amendment.
The foregoing descriptions of the Amendment, the Repurchase Agreement and the related guaranty do not purport to be complete and are qualified in their entirety by reference to (i) the full text of the Amendment, which has been filed with this Current Report on Form 8-K as Exhibit 10.1; (ii) the descriptions of the Repurchase Agreement and the related guaranty in the Company’s Current Report on Form 8-K as filed on November 26, 2012; (iii) the full text of the Repurchase Agreement and the related guaranty attached thereto as Exhibit 1.1 and Exhibit 1.2, respectively; and (iv) the full text of all other amendments to the Repurchase Agreement previously filed with the SEC.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. |
Description |
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10.1 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PENNYMAC MORTGAGE INVESTMENT TRUST |
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Dated: August 31, 2017 |
/s/ Andrew S. Chang |
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Andrew S. Chang Senior Managing Director and Chief Financial Officer |
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EXHIBIT INDEX
Exhibit 10.1
EXECUTION COPY
to the
MASTER REPURCHASE AGREEMENT
Dated as of November 20, 2012,
among
PENNYMAC CORP.
MORGAN STANLEY BANK. N.A.
and
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC
This AMENDMENT NUMBER TEN (this “ Amendment Number Ten ”) is made this 25 th day of August, 2017, among PENNYMAC CORP., a Delaware corporation, as seller, PennyMac Operating Partnership, L. P., a Delaware limited partnership (“ POP ” and together with PennyMac Corp., a “ Seller ” and jointly and severally, the “ Sellers ”), MORGAN STANLEY BANK, N.A., a national banking association, as buyer (“ Buyer ”), and MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC, a New York limited liability company, as agent for Buyer (“ Agent ”), to the Master Repurchase Agreement, dated as of November 20, 2012, between Seller and Buyer, as such agreement may be amended from time to time (the “ Agreement ”). Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement.
RECITALS
WHEREAS, Sellers, Buyer and Agent have agreed to amend the Agreement, subject to the terms hereof, to extend the Termination Date thereunder and to make certain additional modifications thereto, each as more specifically set forth herein; and
WHEREAS, as of the date hereof, each Seller represents to Buyer and Agent that Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:
Section 1. Amendments . Effective as of August 25, 2017 (the “ Amendment Effective Date ”),
(a) the defined term “Termination Date” in Section 1.01 of the Agreement is hereby amended to read in its entirety as follows:
“Termination Date” shall mean August 24, 2018 or such earlier date on which this Repurchase Agreement shall terminate in accordance with the provisions hereof or by operation of law.
(b) the defined term “Committed Amount” in Section 1.01 of the Agreement is hereby amended to read in its entirety as follows:
“C ommitted Amount ” shall mean $250,000,000.
(c) the defined term ““Uncommitted Amount” in Section 1.01 of the Agreement is hereby amended to read in its entirety as follows:
“ Uncommitted Amount ” shall mean $250,000,000.
(d) Section 7.16 of the Agreement is hereby amended to read in its entirety as follows:
7.16 Maintenance of Profitability . The Guarantor shall not permit Net Income (before income taxes), generated over a consecutive three month period, measured on the last day of each fiscal quarter, to be less than $1.00 for two (2) or more consecutive fiscal quarters.
Section 2. Defined Terms . Any terms capitalized but not otherwise defined herein shall have the respective meanings set forth in the Agreement.
Section 3. Effectiveness . This Amendment Number Ten shall become effective as of the date that the Agent shall have received:
(a) counterparts hereof duly executed by each of the parties hereto, and
(b) counterparts of that certain Amendment Number Ten to the Pricing Side Letter, dated as of the date hereof, duly executed by each of the parties thereto.
Section 4. Fees and Expenses . Sellers agree to pay to Buyer and Agent all reasonable out of pocket costs and expenses incurred by Buyer or Agent in connection with this Amendment Number Ten (including all reasonable fees and out of pocket costs and expenses of Buyer’s or Agent’s legal counsel) in accordance with Section 13.04 and 13.06 of the Agreement.
Section 5. Representations . Each Seller hereby represents to Buyer and Agent that as of the date hereof and taking into account the terms of this Amendment Number Ten, such Seller is in full compliance with all of the terms and conditions of the Agreement and each other Repurchase Document and no Default or Event of Default has occurred and is continuing under the Agreement or any other Repurchase Document.
Section 6. Binding Effect; Governing Law . This Amendment Number Ten shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. THIS AMENDMENT NUMBER TEN SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (EXCEPT FOR SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW WHICH SHALL GOVERN).
Section 7. Counterparts . This Amendment Number Ten may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.
Section 8. Limited Effect . Except as amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment Number Ten need not be made in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby.
[Signature Page Follows]
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Exhibit 10.1
EXECUTION COPY
IN WITNESS WHEREOF, Seller, Buyer and Agent have caused this Amendment Number Ten to be executed and delivered by their duly authorized officers as of the Amendment Effective Date.
PENNYMAC CORP.
(Seller)
By: /s/ Andrew S. Chang
Name: Andrew S. Chang
Title: Senior Managing Director
and Chief Financial Officer
PENNYMAC OPERATING PARTNERSHIP, L.P. (Seller)
By: PennyMac GP OP, Inc., its General Partner
By: /s/ Andrew S. Chang
Name: Andrew S. Chang
Title: Senior Managing Director
and Chief Financial Officer
Address for Notices:
3043 Townsgate Road
Westlake Village, California 91361
Attention: Pamela Marsh/Kevin Chamberlain
Phone Number: (805) 330-6059/(818) 746-2877
E-mail: pamela.marsh@pnmac.com;
kevin.chamberlain@pnmac.com
MORGAN STANLEY BANK, N.A.
(Buyer)
By: /s/ Sajid Zaidi
Name: Sajid Zaidi
Title: Authorized Signatory
MORGAN STANLEY MORTGAGE CAPITAL HOLDINGS LLC
(Agent)
By: /s/ Christopher Schmidt
Name: Christopher Schmidt
Title: Vice President