v3.26.1
Secured Borrowings
 3 Months Ended
Mar. 31, 2026
Debt Disclosure [Abstract]  
Secured Borrowings Note 10. Secured Borrowings
The table below presents certain characteristics of secured borrowings.
Pledged Assets
Carrying Value at
Lenders (1)
Asset Class
Current Maturity (2)
Pricing (3)
Facility Size
Carrying
Value
March 31, 2026
December 31, 2025
3
SBA loans
April 2026 to June 2027
SOFR + 2.55%
Prime - 0.82%
$335,000
$382,817
$301,025
$307,522
1
LMM loans - USD
May 2026
SOFR + 1.35%
40,000
8,490
8,277
16,425
1
LMM loans - Non-USD (4)
January 2027
EURIBOR +
3.00%
58,696
21,356
29,413
29,965
2
USDA loans
June 2027 - August 2028
SOFR + 2.75%
198,500
33,851
19,285
31,204
Total borrowings under credit facilities and other financing agreements
$632,196
$446,514
$358,000
$385,116
7
LMM loans
June 2026 - September
2028
SOFR + 2.56%
3,425,000
2,997,237
1,841,176
2,277,028
5
MBS
April 2026 - September
2026
5.38%
122,267
212,800
122,267
126,782
Total borrowings under repurchase agreements
$3,547,267
$3,210,037
$1,963,443
$2,403,810
Total secured borrowings
$4,179,463
$3,656,551
$2,321,443
$2,788,926
(1)Represents the total number of facility lenders.
(2)Current maturity does not reflect extension options available beyond original commitment terms.
(3)Asset class pricing is determined using an index rate plus a weighted average spread.
(4)Non-USD denominated credit facilities and repurchase agreements have been converted into USD for purposes of this disclosure.
In the table above, the agreements governing secured borrowings require maintenance of certain financial and debt
covenants. As of both March 31, 2026 and December 31, 2025, certain financing counterparties covenants calculations
were amended to exclude the PPPLF from certain covenant calculations. As of both March 31, 2026 and December 31,
2025 the Company was in compliance with all debt and financial covenants, as amended.
The table below presents the carrying value of collateral pledged with respect to secured borrowings outstanding.
Pledged Assets Carrying Value
(in thousands)
March 31, 2026
December 31, 2025
Collateral pledged - borrowings under credit facilities and other financing agreements
Loans, held for sale
$25,941
$28,516
Loans, net
420,573
423,151
Total
$446,514
$451,667
Collateral pledged - borrowings under repurchase agreements
Loans, net
2,208,675
2,284,251
MBS
31,648
34,501
Retained interest in assets of consolidated VIEs
181,151
188,113
Loans, held for sale
272,230
506,883
Real estate acquired in settlement of loans
516,333
546,835
Total
$3,210,037
$3,560,583
Total collateral pledged on secured borrowings
$3,656,551
$4,012,250
Note 11. Senior Secured Notes and Corporate Debt, net
Senior secured notes, net
ReadyCap Holdings, LLC (“ReadyCap Holdings”) 4.50% senior secured notes due 2026. On October 20, 2021,
ReadyCap Holdings, an indirect subsidiary of the Company, completed the offer and sale of $350.0 million of its 4.50%
Senior Secured Notes due 2026 (the “2026 Senior Secured Notes”). The 2026 Senior Secured Notes are fully and
unconditionally guaranteed by the Company, each direct parent entity of ReadyCap Holdings, and other direct or indirect
subsidiaries of the Company from time to time that is a direct parent entity of Sutherland Asset III, LLC or otherwise
pledges collateral to secure the 2026 Senior Secured Notes (collectively, the “2026 SSN Guarantors”).
ReadyCap Holdings’ and the 2026 SSN Guarantors’ respective obligations under the 2026 Senior Secured Notes are
secured by a perfected first-priority lien on certain capital stock and assets (collectively, the “2026 SSN Collateral”)
owned by certain subsidiaries of the Company.
The 2026 Senior Secured Notes are redeemable by ReadyCap Holdings’ following a non-call period, through the
payment of the outstanding principal balance of the 2026 Senior Secured Notes plus a “make-whole” or other premium
that decreases the closer the 2026 Senior Secured Notes are to maturity. ReadyCap Holdings is required to offer to
repurchase the 2026 Senior Secured Notes at 101% of the principal balance of the 2026 Senior Secured Notes in the
event of a change in control and a downgrade of the rating on the 2026 Senior Secured Notes in connection therewith, as
set forth more fully in the note purchase agreement governing the 2026 Senior Secured Notes.
The 2026 Senior Secured Notes were issued pursuant to a note purchase agreement, which contains certain customary
negative covenants and requirements relating to the collateral and the Company, ReadyCap Holdings, and the 2026 SSN
Guarantors, including maintenance of minimum liquidity, minimum tangible net worth, maximum debt to net worth
ratio, and limitations on transactions with affiliates.
ReadyCap Holdings 9.375% senior secured notes due 2028. On February 21, 2025, ReadyCap Holdings completed the
offer and sale of $220.0 million of its 9.375% Senior Secured Notes due 2028 (the “2028 Senior Secured Notes” and,
with the 2026 Senior Secured Notes, collectively, the “Senior Secured Notes”) for net proceeds of $216.7 million before
expenses. The 2028 Senior Secured Notes are fully and unconditionally guaranteed by the Company and other direct or
indirect subsidiaries of the Company from time to time that pledge collateral to secure the 2028 Senior Secured Notes
(collectively, the “2028 SSN Guarantors”).
ReadyCap Holdings’ and the 2028 SSN Guarantors’ respective obligations under the 2028 Senior Secured Notes are
secured by a perfected first-priority lien on certain capital stock and assets (collectively, the “2028 SSN Collateral”)
owned by certain subsidiaries of the Company.
The 2028 Senior Secured Notes are redeemable by ReadyCap Holdings following a non-call period, through the
payment of the outstanding principal balance of the 2028 Senior Secured Notes plus a “make-whole” or other premium
that decreases the closer the 2028 Senior Secured Notes are to maturity. ReadyCap Holdings is required to offer to
repurchase the 2028 Senior Secured Notes at 101% of the principal balance of the 2028 Senior Secured Notes in the
event of a change in control and a downgrade of the rating on the 2028 Senior Secured Notes in connection therewith, as
set forth more fully in the note purchase agreement governing the 2028 Senior Secured Notes.
The 2028 Senior Secured Notes were issued pursuant to a note purchase agreement, which contains certain customary
negative covenants and requirements relating to the collateral and the Company, ReadyCap Holdings, and the 2028 SSN
Guarantors, including maintenance of minimum tangible net worth, maximum debt to net worth ratio, unencumbered
cash and asset requirements, and limitations on transactions with affiliates.
On April 16, 2025, ReadyCap Holdings issued an additional $50.0 million in aggregate principal amount of its 2028
Senior Secured Notes for net proceeds of $49.3 million before expenses. The additional notes are fungible with and
treated as a single series of debt securities as the Company’s 2028 Senior Secured Notes issued on February 21, 2025.
The Company used the net proceeds from the issuance of the additional notes to repay its indebtedness and for general
corporate purposes.
Ready Term Holdings, LLC (“Ready Term Holdings”) term loan due 2029. On April 12, 2024, Ready Term Holdings,
an indirect subsidiary of the Company, entered into a credit agreement which provides for a delayed draw term loan to
the Company in an aggregate principal amount not to exceed $115.25 million (the “Term Loan”). The Term Loan is fully
and unconditionally guaranteed by the Company and other direct or indirect subsidiaries of the Company from time to
time that pledge collateral to secure the Term Loan (collectively, the “Term Loan Guarantors”).
Ready Term Holdings’ and the Term Loan Guarantors’ respective obligations under the Term Loan are secured by a
perfected first-priority lien on certain capital stock and assets (collectively, the “Term Loan Collateral”) owned by
certain subsidiaries of the Company.
The Term Loan matures on April 12, 2029, and may be drawn at any time on or prior to January 12, 2025, subject to the
satisfaction of customary conditions. The Company borrowed $75.0 million in connection with the initial closing of the
Term Loan. On August 19, 2024, the Company borrowed an additional $20.0 million. The Term Loan bears interest on
the outstanding principal amount thereof at a rate equal to (a) SOFR plus 5.50% per annum or (b) base rate plus 4.50%
per annum; provided that if at any time the Term Loan is rated below investment grade, the interest rate shall increase to
(x) SOFR plus 6.50% per annum or (y) base rate plus 5.50% per annum until the rating is no longer below investment
grade. In connection with the entry into the credit agreement, the Company also agreed to pay certain upfront fees on the
initial borrowing date. The Company will also pay, with respect to any unused portion of the Term Loan, a commitment
fee of 1.00% per annum.
The Term Loan was issued pursuant to a credit agreement, which contains certain customary representations and
warranties and affirmative and negative covenants and requirements relating to the collateral and the Company, Ready
Term Holdings, and the Term Loan Guarantors, including maintenance of a minimum asset coverage ratio and a
maximum debt to equity ratio.
As of March 31, 2026, the Company was in compliance with all covenants with respect to the Senior Secured Notes and
the Term Loan, as amended.
Corporate debt, net
The Company issues senior unsecured notes in public and private transactions. The notes are governed by a base
indenture and supplemental indentures. Often, the notes are redeemable by us following a non-call period, through the
payment of the outstanding principal balance plus a “make-whole” or other premium that typically decreases the closer
the notes are to maturity. The Company often is required to offer to repurchase the notes, in some cases at 101% of the
principal balance of the notes, in the event of a change in control or fundamental change pertaining to our company, as
defined in the applicable supplemental indentures. The notes rank equal in right of payment to any of its existing and
future unsecured and unsubordinated indebtedness; effectively junior in right of payment to any of its existing and future
secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all
existing and future indebtedness, other liabilities (including trade payables) and (to the extent not held by us) preferred
stock, if any, of our subsidiaries. The supplemental indentures governing the notes often contain customary negative
covenants and financial covenants relating to maintenance of minimum liquidity, minimum tangible net worth,
maximum debt to net worth ratio and limitations on transactions with affiliates.
In addition, in connection with the merger among the Company, Broadmark Realty Capital Inc. (“Broadmark”), and
RCC Merger Sub, LLC, a wholly owned subsidiary of the operating partnership (“RCC Merger Sub”), in which
Broadmark merged with and into RCC Merger Sub, with RCC Merger Sub remaining as a wholly owned subsidiary of
the operating partnership (the “Broadmark Merger”), RCC Merger Sub assumed Broadmark’s obligations on certain
senior unsecured notes. The note purchase agreement governing these notes contains financial covenants that require
compliance with leverage and coverage ratios and maintenance of minimum tangible net worth, as well as other
customary affirmative and negative covenants.
As of March 31, 2026, the Company was in compliance with all covenants with respect to its Corporate debt.
The table below presents information about senior secured notes and corporate debt issued through public and private
transactions.
(in thousands)
Coupon Rate
Maturity Date
March 31, 2026
Senior secured notes principal amount(1)
4.50%
10/20/2026
$350,000
Senior secured notes principal amount(2)
9.375%
3/1/2028
270,000
Term loan principal amount(3)
SOFR + 5.50%
4/12/2029
115,250
Unamortized discount
(1,747)
Unamortized deferred financing costs
(9,796)
Total senior secured notes, net
$723,707
Corporate debt principal amount(4)
5.50%
12/30/2028
110,000
Corporate debt principal amount(5)
6.20%
7/30/2026
67,443
Corporate debt principal amount(6)
7.375%
7/31/2027
100,000
Corporate debt principal amount(7)
5.00%
11/15/2026
100,000
Corporate debt principal amount(8)
9.00%
12/15/2029
129,371
Unamortized discount - corporate debt
(4,600)
Unamortized deferred financing costs - corporate debt
(1,492)
Junior subordinated notes principal amount(9)
SOFR + 3.10%
3/30/2035
15,000
Junior subordinated notes principal amount(10)
SOFR + 3.10%
4/30/2035
21,250
Total corporate debt, net
$536,972
Total carrying amount of debt
$1,260,679
(1)Interest on the senior secured notes is payable semiannually on April 20 and October 20 of each year.
(2)Interest on the senior secured notes is payable semiannually on March 1 and September 1 of each year.
(3)Interest on the term loan is payable quarterly on January 12, April 12, July 12 and October 12 of each year.
(4)Interest on the corporate debt is payable semiannually on June 30 and December 30 of each year.
(5)Interest on the corporate debt is payable quarterly on January 30, April 30, July 30, and October 30 of each year.
(6)Interest on the corporate debt is payable semiannually on January 31 and July 31 of each year.
(7)Interest on the corporate debt is payable semiannually on May 15 and November 15 of each year; assumed as part of the Broadmark Merger (as defined above).
(8)Interest on the corporate debt is payable quarterly on March 15, June 15, September 15, and December 15 of each year.
(9) Interest on the Junior subordinated notes I-A is payable quarterly on March 30, June 30, September 30, and December 30 of each year.
(10) Interest on the Junior subordinated notes I-B is payable quarterly on January 30, April 30, July 30, and October 30 of each year.
The table below presents the contractual maturities for senior secured notes and corporate debt.
(in thousands)
March 31, 2026
2026
$517,443
2027
100,000
2028
380,000
2029
244,621
2030
—
Thereafter
36,250
Total contractual amounts
$1,278,314
Unamortized deferred financing costs, discounts, and premiums, net
(17,635)
Total carrying amount of debt
$1,260,679