TIPTREE INC
For the period ended Mar 31, 2024. Filed May 1, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 1, 2024
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(10) Debt, net
The following table presents the balance of the Company’s debt obligations, net of discounts and deferred financing costs for our corporate and asset based debt. Asset based debt is generally recourse only to specific assets and related cash flows.
| As of March 31, 2024 | |||
|---|---|---|---|
| Corporate debt | Insurance | Mortgage | Total |
| Secured revolving credit agreements (1) | $129,000 | $— | $129,000 |
| Preferred trust securities (LIBOR + 4.10%) | 35,000 | — | 35,000 |
| 8.50% Junior subordinated notes | 125,000 | — | 125,000 |
| Total corporate debt | 289,000 | — | 289,000 |
| Asset based debt | |||
| Asset based revolving financing (SOFR + 2.75%) | 69,218 | — | 69,218 |
| Residential mortgage warehouse borrowings (1.75% to 2.50% over SOFR) (2)(3) | — | 56,456 | 56,456 |
| Total asset based debt | 69,218 | 56,456 | 125,674 |
| Total debt, face value | 358,218 | 56,456 | 414,674 |
| Unamortized deferred financing costs | (8,712) | (206) | (8,918) |
| Total debt, net | $349,506 | $56,250 | $405,756 |
| As of December 31, 2023 | |||
| Corporate debt | Insurance | Mortgage | Total |
| Secured revolving credit agreements (1) | $130,000 | $— | $130,000 |
| Preferred trust securities (LIBOR + 4.10%) | 35,000 | — | 35,000 |
| 8.50% Junior subordinated notes | 125,000 | — | 125,000 |
| Total corporate debt | 290,000 | — | 290,000 |
| Asset based debt | |||
| Asset based revolving financing (LIBOR + 2.75%) | 67,138 | — | 67,138 |
| Residential mortgage warehouse borrowings (1.75% to 2.75% over SOFR) (2)(3) | — | 54,350 | 54,350 |
| Total asset based debt | 67,138 | 54,350 | 121,488 |
| Total debt, face value | 357,138 | 54,350 | 411,488 |
| Unamortized deferred financing costs | (8,950) | (127) | (9,077) |
| Total debt, net | $348,188 | $54,223 | $402,411 |
(1)The secured credit agreements include separate tranches with multiple rate structures that are adjustable based on Fortegra’s senior leverage ratio, which as of March 31, 2024 and December 31, 2023 was SOFR +1.50%.
(2)As of March 31, 2024, included (i) a $50,000 line of credit at 1.75%,2.00% and 2.50% over the one month SOFR rate, (ii) a $25,000 line of credit at 1.75% or 2.25% over the one month SOFR rate, with a floor of 4.00%, and (iii) a $25,000 line of credit at 1.875% over the one month SOFR rate. As of December 31, 2023, included (i) a $50,000 line of credit at 1.75%,2.00% and 2.50% over the one month SOFR rate, and (ii) a $65,000 line of credit at 1.75%,2.25% and 2.75% over the one month SOFR rate, with a floor of 4.00%.
(3)The weighted average coupon rate for residential mortgage warehouse borrowings was 7.18% and 7.15% at March 31, 2024 and December 31, 2023, respectively.
The following table presents the amount of interest expense the Company incurred on its debt for the following periods:
| Three Months Ended March 31, | ||
|---|---|---|
| 2024 | 2023 | |
| Interest expense - corporate debt | $6,002 | $4,430 |
| Interest expense - asset based debt | 2,288 | 2,035 |
| Total interest expense on debt | $8,290 | $6,465 |
The following table presents the contractual principal payments and future maturities of the unpaid principal balance on the Company’s debt for the following periods:
| As of March 31, 2024 | |
|---|---|
| Remainder of 2024 | $38,047 |
| 2025 | 18,409 |
| 2026 | 69,218 |
| 2027 | 129,000 |
| 2028 | — |
| 2029 and thereafter | 160,000 |
| Total | $414,674 |
The following narrative is a summary of certain terms of our debt agreements for the three months ended March 31, 2024:
Corporate Debt
Secured Revolving Credit Agreements
As of March 31, 2024 and December 31, 2023, a total of $129,000 and$130,000, respectively, was outstanding under the revolving line of credit in our insurance business. The maximum borrowing capacity under the agreements as of March 31, 2024 was $200,000.
Asset Based Debt
Asset Based Revolving Financing
On October 6, 2023, subsidiaries of Fortegra amended the asset based revolving financing to increase the revolving commitment to $125,000 and transition to SOFR. As of March 31, 2024 and December 31, 2023, a total of $69,218 and $67,138, respectively, was outstanding under the borrowing related to our premium finance offerings in our insurance business.
Residential Mortgage Warehouse Borrowings
As of March 31, 2024, our mortgage business hadthree warehouse lines of credit with three separate lending partners totaling $100,000 of borrowing capacity. The $50,000 line of credit matures in August 2024 and the two $25,000 lines of credit mature in September 2024 and February 2025. As of March 31, 2024 and December 31, 2023, a total of $56,456 and $54,350, respectively, was outstanding under such financing agreements.
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