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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): March 28, 2024
Angel Oak Mortgage REIT, Inc.
(Exact name of registrant as specified in its charter)
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Maryland | 001-40495 | 37-1892154 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
3344 Peachtree Road Northeast, Suite 1725, Atlanta, Georgia 30326
(Address of Principal Executive Offices and Zip Code)
Registrant’s telephone number, including area code: (404) 953-4900
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 (see General Instruction A.2. below):
☐ 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))
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock, $0.01 par value per share | AOMR | New York Stock Exchange |
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).
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| Emerging growth company | ☐ |
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| 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.
On Mach 28, 2024, Angel Oak Mortgage REIT, Inc. (the “Company”) and two of its subsidiaries (the “Subsidiaries”), entered into a $250.0 million repurchase facility agreement with a Lender, “Global Investment Bank 2” through the execution of a Master Repurchase Agreement (the “Master Repurchase Agreement”) between the Subsidiaries as sellers, Global Investment Bank 2 as buyer and the Company as Guarantor. Pursuant to the Master Repurchase Agreement and corresponding Pricing Side Letter, the termination date of the loan financing facility is March 27, 2026, unless such term is extended or terminated earlier pursuant to the terms of the Master Repurchase Agreement.
The amount expected to be advanced by Global Investment Bank 2 is generally in line with other similar agreements that the Company or one or more of its subsidiaries has entered into, which is a percentage of the unpaid principal balance or market value of the whole loan asset depending on the delinquency of the underlying whole loan asset. Similarly, the interest rate on any outstanding balance under the Master Repurchase Agreement that the applicable Subsidiary is required to pay Global Investment Bank 2 is generally in line with other similar agreements that the Company or one or more of its subsidiaries has entered into, where the interest rate is equal to the sum of (1) a pricing spread and (2) the Term SOFR Reference Rate. Additionally, Global Investment Bank 2 is under no obligation to purchase the whole loan assets we offer to sell to them.
The obligations of the Subsidiaries under the Master Repurchase Agreement are guaranteed by the Company pursuant to a Guaranty (the “Guaranty”) executed contemporaneously with the master Repurchase Agreement. In addition, and similar to other repurchase agreements the Company has entered into, the Company is subject to various financial and other covenants, including those related to (1) net asset value; (2) a maximum ratio of indebtedness to the net asset value; and (3) minimum liquidity.
In addition, the Master Repurchase Agreement and Guaranty contain 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, insolvency 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 amounts outstanding under the Master Repurchase Agreement and Global Investment Bank 2’s right to liquidate the purchased whole loan assets then subject to the Master Repurchase Agreement.
The Subsidiaries are also required to pay certain customary fees to Global Investment Bank 2 to reimburse Global Investment Bank 2 for certain costs and expenses incurred in connection with Global Investment Bank 2’s management and ongoing administration of the Master Repurchase Agreement and its review of the whole loan assets subject to the Master Repurchase Agreement and certain costs associated with early repurchases.
Further, the interest rate pricing margin will range from 2.10% to 3.35%, based on loan status, dwell time and other factors.
A copy of the Form of Master Repurchase Agreement is attached hereto as Exhibit 10.1 and incorporated herein by reference. A copy of the Form of Pricing Side Letter is attached hereto as Exhibit 10.2 and incorporated herein by reference. A copy of the Form of Guaranty is attached hereto as Exhibit 10.3 and incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement
Contemporaneously with the execution of the Master Repurchase Agreement and Guaranty, the existing $250.0 million repurchase facility with Global Investment Bank 2 was terminated.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information required by Item 2.03 contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Exhibit No.
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| Exhibit 10.1 | + | |
| Exhibit 10.2 | + | |
| Exhibit 10.3 | + | |
| Exhibit 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
+ Portions of this exhibit are redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.
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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Date: March 28, 2024 | | | ANGEL OAK MORTGAGE REIT, INC. |
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| | | By: /s/ Brandon Filson |
| | | Name: Brandon Filson |
| | | Title: Chief Financial Officer and Treasurer |
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