PennyMac Mortgage Investment Trust (NYSE:PMT) Files An 8-K Entry into a Material Definitive AgreementItem 1.01Entry into a Material Definitive Agreement.
On December 18, 2017, PennyMac Mortgage Investment Trust (the “Company”), through its wholly-owned subsidiary, PennyMac Corp. (“PMC”), executed a Temporary Increase Letter (the “Temporary Increase”) in connection with that certain Master Repurchase Agreement, dated as of August 18, 2017, by and among Deutsche Bank AG, Cayman Islands Branch (“Deutsche Bank”) and PMC (the “Repurchase Agreement”), to which PMC may sell to Deutsche Bank, and later repurchase, newly originated mortgage loans in an aggregate principal amount of up to $500 million. The Repurchase Agreement is set to expire on August 18, 2019, unless terminated earlier in accordance with its terms. The obligations of PMC under the Repurchase Agreement are fully guaranteed by the Company and the mortgage loans are serviced by PennyMac Loan Services, LLC, a controlled subsidiary of PennyMac Financial Services, Inc. (NYSE: PFSI), to the terms of the Repurchase Agreement.
to the terms of the Temporary Increase, the maximum aggregate principal amount provided for thereunder was temporarily increased to $750 million. The period for the Temporary Increase commenced on December 18, 2017 and will expire on January 17, 2018. Upon the expiration of the Temporary Increase, the maximum aggregate principal amount will revert back to $500 million. All other terms and conditions of the Repurchase Agreement and the related guaranty remain the same in all material respects. The Company, through PMC, is required to pay Deutsche Bank certain administrative costs and expenses in connection with the structuring of the Temporary Increase.
The foregoing descriptions of the Repurchase Agreement and the related guaranty by the Company do not purport to be complete and are qualified in their entirety by reference to (i) the descriptions of the Repurchase Agreement and the related guaranty in the Company’s Current Report on Form 8-K as filed on August 24, 2017; (ii) the full text of the Repurchase Agreement and the related guaranty attached thereto as Exhibits 10.1 and 10.2, respectively;and (iii) any amendments to the Repurchase Agreement filed thereafter.
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 Current Report on Form 8-K is incorporated herein by reference.
Item 8.01 Other Events.
On December 19, 2017, the Board of Trustees of the Company also approved an increase in its previously announced share repurchase program from $200 million to $300 million.Under the program, the Company is authorized to repurchase its outstanding common shares of beneficial interest.
Share repurchases may be executed through various means, including, without limitation, open market transactions, block trades, tender offers and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, the Company’s share price, applicable legal requirements and other factors. The share repurchase program does not have an expiration date and the authorization does not obligate the Company to acquire any particular amount of common shares. The share repurchase program may be suspended or discontinued at the Company’s discretion without prior notice.
About PennyMac Mortgage Investment Trust (NYSE:PMT)
PennyMac Mortgage Investment Trust is a specialty finance company that invests primarily in residential mortgage loans and mortgage-related assets. The Company conducts all of its operations, and makes all of its investments, through PennyMac Operating Partnership, L.P. and its subsidiaries. It operates through two segments: correspondent production and investment activities. The correspondent production segment represents its operations aimed at serving as an intermediary between mortgage lenders and the capital markets by purchasing, pooling and reselling newly originated prime credit quality mortgage loans either directly or in the form of mortgage-backed securities (MBS), using the services of PNMAC Capital Management and PennyMac Loan Services, LLC. The investment activities segment represents its investments in mortgage-related assets, which include distressed mortgage loans, real estate acquired in settlement of loans, MBS, mortgage servicing rights and excess servicing spread.