PennyMac Financial Services, Inc. (NYSE:PFSI) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01Entry into a Material Definitive Agreement.

Repurchase Agreement with Citibank, N.A.

On March 3, 2017, PennyMac Financial Services, Inc. (the
Company), through its indirect controlled subsidiary, PennyMac
Loan Services, LLC (PLS), entered into an amendment and
restatement of its Master Repurchase Agreement, dated as of June
26, 2012, by and between Citibank, N.A. (Citibank) and PLS (the
Citi Repurchase Agreement), to whichPLS may sell to, and later
repurchase from, Citibankcertain newly originated mortgage loans
that are originated through the PLS consumer direct lending
channel or purchased from correspondent sellers through a
subsidiary of PennyMac Mortgage Investment Trust (NYSE: PMT) and,
in either case, held by PLS pending sale and/or securitization.
The Citi Repurchase Agreement is committed to March 2, 2018 and
provides for a maximum aggregate purchase price of $400 million,
of which $200 million is committed. The obligations of PLS are
fully guaranteed by Private National Mortgage Acceptance Company,
LLC (PNMAC). The Company is a holding corporation and its sole
investment is an equity interest in PNMAC.

to the terms of the Citi Repurchase Agreement, the principal
amount paid by Citibank for each eligible mortgage loan is based
on a percentage of the lesser of the market value as determined
by Citibank in its sole discretion or the unpaid principal
balance of such mortgage loan. Upon the repurchase of a mortgage
loan, PLS is required to repay Citibank the principal amount
related to such mortgage loan plus accrued interest (at a rate
reflective of the current market and based on LIBOR plus a
margin) to the date of such repurchase.The Company, through PLS,
is required to pay Citibank a commitment fee relating to the
amendment and restatement, as well as certain other
administrative costs and expenses.

The Citi Repurchase Agreement requiresthat PLS maintain various
financial and other covenants, which include maintaining (i) a
minimum adjusted tangible net worth at all times greater than or
equal to $170 million; (ii) a minimum in unrestricted cash at all
times greater than or equal to $20 million; (iii) a ratio of
total indebtedness to adjusted tangible net worth at all times
not to exceed 10:1; and (iv) profitability of at least $1.00 for
at least one (1) of the previous two (2) calendar quarters.

The Citi Repurchase Agreementcontains margin call provisions that
provide Citibank with certain rights where there has been a
decline in the market value of the purchased mortgage loans.
Under these circumstances, Citibank may require PLS to transfer
cash or additional eligible mortgage loans with an aggregate
market value in an amount sufficient to eliminate any margin
deficit resulting from such a decline.

In addition, the Citi Repurchase Agreementcontains 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,
servicer termination events, guarantor defaults, bankruptcy or
insolvency proceedings and other events of default customary for
this type of transaction. The remedies for such events of default
are also customary for these types of transactions and include
the acceleration of the principal amount outstanding under the
Citi Repurchase Agreements and the liquidation by Citibank of the
mortgage loans then subject to the Citi Repurchase Agreements.

The foregoing descriptions of the Citi 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 Amended and Restated Master Repurchase Agreement, which has
been filed with this Current Report on Form 8-K as Exhibit 10.1
and (ii) the full text of the Guaranty Agreement, which was filed
as Exhibit 10.61 to the Companys Annual Report on Form 10-K filed
on March 13, 2015.

Item 2.03Creation 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 report is
incorporated herein by reference.

About PennyMac Financial Services, Inc. (NYSE:PFSI)

PennyMac Financial Services, Inc. (PFSI) is a financial services company. The Company is focused on the production and servicing of the United States residential mortgage loans and the management of investments related to the United States mortgage market. It operates through three segments: loan production, loan servicing and investment management. Its loan production segment is sourced through approximately two channels: correspondent production and consumer direct lending. Its loan servicing segment performs loan administration, collection and default management activities, including the collection and remittance of loan payments; response to customer inquiries; accounting for principal and interest; counseling delinquent mortgagors, and supervising foreclosures and property dispositions. Its investment management segment represents the activities of the Company’s investment manager, which include sourcing, performing diligence, bidding and closing investment asset acquisitions.

PennyMac Financial Services, Inc. (NYSE:PFSI) Recent Trading Information

PennyMac Financial Services, Inc. (NYSE:PFSI) closed its last trading session down -0.45 at 17.60 with 191,721 shares trading hands.