PennyMac Mortgage Investment Trust (NASDAQ:PMT) Files An 8-K Entry into a Material Definitive Agreement

Item1.01Entry into a Material Definitive Agreement.

Second Amended and Restated Master Spread Acquisition and MSR
Servicing Agreement

On December19, 2016, PennyMac Mortgage Investment Trust (the
Company), through one of its subsidiaries, PennyMac Holdings, LLC
(PMH), entered into a Second Amended and Restated Master Spread
Acquisition and MSR Servicing Agreement with PennyMac Loan
Services, LLC (PLS), an indirect controlled subsidiary of
PennyMac Financial Services, Inc. (NYSE: PFSI) (the Spread
Acquisition Agreement). The Spread Acquisition Agreement was
approved by a majority of the independent members of the Companys
board of trustees.

to the Spread Acquisition Agreement, PMH may acquire from PLS,
from time to time, the right to receive participation
certificates representing beneficial ownership in excess
servicing spread (ESS) arising from Ginnie Mae mortgage servicing
rights (MSRs) acquired by PLS, in which case PLS generally would
be required to service or subservice the related mortgage loans
for Ginnie Mae.

To the extent PLS refinances any of the mortgage loans relating
to the ESS acquired by PMH, the Spread Acquisition Agreement
contains recapture provisions requiring that PLS transfer to PMH,
at no cost, the ESS relating to a certain percentage of the
unpaid principal balance of the newly originated mortgage loans.
In any month where the transferred ESS relating to such newly
originated mortgage loans is not equivalent to at least 90% of
the product of the excess servicing fee rate and the unpaid
principal balance of the refinanced mortgage loans, the Spread
Acquisition Agreement also contains provisions that require PLS
to transfer additional ESS or cash in the amount of such
shortfall. Similarly, in any month where the transferred ESS
relating to modified Ginnie Mae mortgage loans is not equivalent
to at least 90% of the product of the excess servicing fee rate
and the unpaid principal balance of the modified mortgage loans,
the Spread Acquisition Agreement contains provisions that require
PLS to transfer additional ESS or cash in the amount of such
shortfall. To the extent the fair market value of the aggregate
ESS to be transferred for the applicable month is less than
$200,000, PLS may, at its option, wire cash to PMH in an amount
equal to such fair market value in lieu of transferring such ESS.

The Spread Acquisition Agreement contains customary
representations, warranties and covenants between PMH and PLS, as
well as indemnities in favor of each party as a result of losses
caused by certain actions or inactions of the other party. As a
condition to its acquisition of the ESS, PMH is also required to
subordinate its rights to the ESS and its rights under the Spread
Acquisition Agreement to the rights and interests of Ginnie Mae
in the MSRs as a whole, inclusive of the acquired ESS. The
specific terms of each transaction under the Spread Acquisition
Agreement will be subject to the terms of such agreement as
modified and supplemented by the terms of a confirmation executed
in connection with such transaction.

The Spread Acquisition Agreement amends and restates that certain
amended and restated spread acquisition and MSR servicing
agreement originally entered into by and between PMH and PLS on
April30, 2015. The primary purpose of the amendment and
restatement was to facilitate the continued financing of the ESS
owned by PMH in connection with the parties participation in the
GNMA MSR Facility (as defined below).

The foregoing description does not purport to be complete and is
qualified in its entirety by reference to the full text of the
Spread Acquisition Agreement, which has been filed with this
Current Report on Form8-K as Exhibit 10.1 hereto.

Master Repurchase Agreement

On December19, 2016, the Company, through PMH, entered into a
master repurchase agreement (the PMH Repurchase Agreement) with
PLS, to which PMH may borrow from PLS for the purpose of
financing its participation certificates representing beneficial
ownership in ESS. PLS then re-pledges such participation
certificates to PNMAC GMSR ISSUER TRUST (Issuer Trust) under a
master repurchase agreement, dated as of December19, 2016, by and
among Issuer Trust, PLS and Private National Mortgage Acceptance
Company, LLC, as guarantor (the PC Repurchase Agreement). Issuer
Trust was formed by PLS as part of a structured finance
transaction, to which PLS may finance MSRs and ESS relating to
such MSRs (the GNMA MSR Facility).

In connection with the GNMA MSR Facility, PLS pledges and/or
sells to Issuer Trust participation certificates representing
beneficial interests in MSRs and ESS to the terms of the PC
Repurchase Agreement. In return, Issuer Trust (a)has issued to
PLS the Series 2016-MSRVF1 Variable Funding Note, dated
December19, 2016, known as the PNMAC GMSR ISSUER TRUST MSR
Collateralized Notes, Series 2016-MSRVF1 (the VFN), and (b)may,
from time to time, issue to institutional investors additional
term notes (Term Notes), in each case secured on a pari
passu basis by the participation certificates relating to
the MSRs and ESS. The maximum principal balance of the VFN is
$1,000,000,000.

The principal amount paid by PLS for the participation
certificates under the PMH Repurchase Agreement is based upon a
percentage of the market value of the underlying ESS.Upon PMHs
repurchase of the participation certificates, PMH is required to
repay PLS the principal amount relating thereto plus accrued
interest (at a rate reflective of the current market and
consistent with the weighted average note rate of the VFN and any
outstanding Term Notes) to the date of such repurchase. PLS is
then required to repay Issuer Trust the corresponding amount
under the PC Repurchase Agreement.

The PMH Repurchase Agreement contains margin call provisions that
provide PLS with certain rights in the event of a decline in the
market value of the purchased ESS. Under these provisions, PLS
may require PMH to transfer cash to PLS or include additional
mortgage loans in the purchased ESS in an amount sufficient to
eliminate any margin deficit resulting from such a decline.

The PMH Repurchase Agreement requires PMH to make certain
representations and warranties and to maintain various financial
and other covenants, which include maintaining (i)a minimum
adjusted tangible net worth of $200 million, as of the last day
of each calendar month, (ii)a minimum of unrestricted cash and
cash equivalents at all times greater than or equal to $10
million, and (iii)a maximum ratio of total liabilities to
adjusted tangible net worth of 10:1.

In addition, the PMH Repurchase Agreement contains events of
default (subject to certain materiality thresholds and grace
periods), including payment defaults, breaches of covenants
and/or certain representations and warranties, guarantor
defaults, bankruptcy or insolvency proceedings and other events
of default customary for this type of transaction. The remedies
for such events of default include the acceleration of the
principal amount outstanding under the PMH Repurchase Agreement
and the enforcement by PLS of other remedies available.

to the PMH Repurchase Agreement, PMH grants to PLS a security
interest in all of its right, title and interest in, to and under
the participation certificates and underlying ESS subject to
transactions thereunder. The obligations of PMH under the PMH
Repurchase Agreement are guaranteed in full by the Company (the
PMT Guaranty). to the PC Repurchase Agreement, PLS assigns all of
its rights in the PMT Guaranty to Issuer Trust.

In connection with the execution of the PMH Repurchase Agreement,
PMH and PLS terminated that certain Loan and Security Agreement
(the LSA), dated as of April30, 2015, by and between the parties.
PMH had previously used the LSA for the purpose of financing
through PLS the ESS that is now being financed under the PMH
Repurchase Agreement.

Subordination, Acknowledgment and Pledge Agreement

On December19, 2016, PMH and Issuer Trust entered into a
subordination, acknowledgement and pledge agreement (the
Subordination Agreement), to which PMH pledged all of its rights
and interest in its ESS to Issuer Trust. Because PMH has, and in
the future may have, under the Spread Acquisition Agreement an
interest in a portion of the ESS pledged under the PC Repurchase
Agreement, Issuer Trust requires such interest to be subject to
Issuer Trusts continuing lien on such ESS, the pledge and
acknowledgement of which were effected to the Subordination
Agreement. Issuer Trusts lien on such ESS remains subordinate to
the rights and interests of Ginnie Mae to the provisions of the
Spread Acquisition Agreement and the terms of the acknowledgement
agreement by and among Ginnie Mae, the indenture trustee for the
Issuer Trust and PLS.

The Subordination Agreement contains representations, warranties
and covenants by PMH that are customary for financing
transactions. To the extent there exists an event of default
under the PC Repurchase Agreement or a trigger event (as defined
in the Subordination Agreement), Issuer Trust would be entitled
to liquidate any and all of the collateral securing the PC
Repurchase Agreement, including the ESS subject to the PMH
Repurchase Agreement.

The foregoing descriptions of the PMH Repurchase Agreement, the
PMT Guaranty and the Subordination Agreement do not purport to be
complete and are qualified in their entirety by reference to the
full text of such agreements, which have been filed with this
Current Report on Form 8-K as Exhibit 10.2, Exhibit 10.3 and
Exhibit 10.4, respectively.

Item2.03Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.

The information set forth under Item1.01 of this report under the
heading Master Repurchase Agreement is incorporated
herein by reference.

Item9.01Financial Statements and Exhibits.

About PennyMac Mortgage Investment Trust (NASDAQ:PMT)