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

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

Item 1.01 Entry into a Material Definitive Agreement.

On March 15, 2017, PennyMac Mortgage Investment Trust (the
Company), through its wholly-owned subsidiaries, PennyMac Corp.
(PMC), PennyMac Holdings, LLC (PMH), PennyMac Operating
Partnership, L.P. (POP, and together with PMC and PMH, the
Sellers) and PMC REO Trust 2015-1 (the REO Subsidiary) entered
into an Amended and Restated Master Repurchase Agreement with
JPMorgan Chase Bank, National Association (JPM), to which the
Sellers may sell, and later repurchase, certain residential
mortgage loans and mortgage-related assets (the Facility Assets)
in an aggregate principal amount of up to $300 million (the
Credit Facility). The obligations of the Sellers are fully
guaranteed by the Company, and the Facility Assets are serviced
by PennyMac Loan Services, LLC (PLS), an affiliate and a
subsidiary of PennyMac Financial Services, Inc. (NYSE: PFSI), to
the terms of the Credit Facility. The Credit Facility has a term
expiring on March 14, 2018.

Under the terms of the Credit Facility, (i) PMC and PMH may each
sell to JPM eligible distressed mortgage loans and, in the case
of PMC, the equity interests (the REO Interests) in the REO
Subsidiary, which owns distressed loans and real properties
acquired upon settlement of mortgage loans, including rental
properties (the REO Properties), and (ii) POP may sell to JPM
eligible distressed mortgage loans that have been purchased by
PMC and then pledged by PMC to POP pending sale, securitization
or liquidation and the REO Interests pledged by PMC to POP
pending the sale or liquidation of the underlying REO Properties.

The principal amount paid by JPM for each mortgage loan and for
the REO Interests (by reference to the underlying REO Properties)
is based on a percentage of the least of (x) the market value of
such mortgage loan or underlying REO Property, (y) the
outstanding principal balance of such mortgage loan or underlying
REO Property, and (z) the most current brokers price opinion
value of such mortgaged property or underlying REO Property.

Upon the applicable Sellers repurchase, or the sale,
securitization or liquidation, of a Facility Asset or REO
Property, such Seller is required to repay JPM the principal
amount related to such Facility Asset or REO Property plus
accrued interest (at a rate reflective of the current market and
based on LIBOR plus a margin) to the date of such repurchase,
sale, securitization or liquidation.The Sellers are also required
to pay JPM certain other administrative costs and expenses in
connection with JPMs structuring, management and ongoing
administration of the Credit Facility.

The Credit Facility contains margin call provisions that provide
JPM with certain rights where there has been a decline in the
market value of the Facility Assets.Under these circumstances,
JPM may require the Sellers to transfer cash or additional
mortgage loans or REO Properties with an aggregate market value
in an amount sufficient to eliminate any margin deficit resulting
from such a decline.

The Credit Facility and the related guaranty require the Company
to maintain various financial and other covenants, which include
maintaining (i) a minimum tangible net worth of $860 million;
(ii) a minimum of unrestricted cash and cash equivalents of $40
million on a consolidated basis; (iii) a maximum ratio of total
liabilities to tangible net worth, on a consolidated basis, as of
the end of the month, of 5:1; and (iv) profitability of at least
$1.00 for at least one (1) of the two (2) prior fiscal quarters.

The Credit Facility also requires the Sellers to maintain various
financial and other covenants, which include maintaining (i) a
minimum tangible net worth of $150 million for PMC, $250 million
for PMH and $700 million for POP, in each case on a consolidated
basis, (ii) a minimum of unrestricted cash and cash equivalents
of $10 million at each of PMC and PMH and $40 million at POP on a
consolidated basis, and (iii) a maximum ratio of total
liabilities to tangible net worth, as of the end of the month, of
10:1 at PMC and 5:1 at POP, in each case on a consolidated basis.

In addition, the Credit Facility contains 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 this type of transaction and include the
acceleration of the principal amount outstanding under the Credit
Facility and the liquidation by JPM of the Facility Assets,
rental property and REO Properties then subject to the Credit
Facility.

The Credit Facility amends and restates that certain master
repurchase agreement originally entered into by the Company, the
Sellers, PMC REO Trust 2015-1 and TRS REO Trust 1-A on January
27, 2015. The primary purposes of the amendment and restatement
were to expand the REO Properties to include rental properties,
reduce the maximum aggregate principal amount from $500 million
to $300 million, remove TRS REO Trust 1-A as a party to the
Credit Facility and otherwise incorporate the terms of previously
executed amendments.

The foregoing descriptions of the Credit Facility and the related
guaranty do not purport to be complete and are qualified in their
entirety by reference to the full text of the Amended and
Restated Master Repurchase Agreement and the Amended and Restated
Guaranty, which have been filed with this Current Report on Form
8-K as Exhibits 10.1 and 10.2, respectively.

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.

Exhibit No.

Description

10.1

Amended and Restated Master Repurchase Agreement, dated
as of March 15, 2017, among JPMorgan Chase Bank, National
Association, PennyMac Corp., PennyMac Operating
Partnership, L.P., PennyMac Holdings, LLC, PMC REO Trust
2015-1 and PennyMac Mortgage Investment Trust

10.2

Amended and Restated Guaranty, dated as of March 15,
2017, of PennyMac Mortgage Investment Trust in favor of
JPMorgan Chase Bank, National Association

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. PennyMac Mortgage Investment Trust (NYSE:PMT) Recent Trading Information
PennyMac Mortgage Investment Trust (NYSE:PMT) closed its last trading session down -0.02 at 17.12 with 337,131 shares trading hands.

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