TIPTREE INC
For the period ended Sep 30, 2024. Filed Oct 30, 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.
Sep 30, 2024 · Filed Oct 30, 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 September 30, 2024 | |||
|---|---|---|---|
| Corporate debt | Insurance | Mortgage | Total |
| Secured revolving credit agreements (1) | $100,000 | $— | $100,000 |
| Preferred trust securities (LIBOR + 4.10%) | 35,000 | — | 35,000 |
| 8.50% Junior subordinated notes | 125,000 | — | 125,000 |
| Total corporate debt | 260,000 | — | 260,000 |
| Asset based debt | |||
| Asset based revolving financing (SOFR + 2.75%) | 67,159 | — | 67,159 |
| Residential mortgage warehouse borrowings (1.75% to 3.30% over SOFR) (2)(3) | — | 69,679 | 69,679 |
| Total asset based debt | 67,159 | 69,679 | 136,838 |
| Total debt, face value | 327,159 | 69,679 | 396,838 |
| Unamortized deferred financing costs | (8,235) | (80) | (8,315) |
| Total debt, net | $318,924 | $69,599 | $388,523 |
| 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 (SOFR + 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 September 30, 2024 and December 31, 2023 was SOFR +1.50%.
(2)As of September 30, 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% over the one month SOFR rate, with a floor of 2.75%, (iii) a $30,000 line of credit at 1.875% over the one month SOFR rate and (iv) a $10,000 line of credit at 3.30% 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 6.76% and 7.15% at September 30, 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 September 30, | Nine Months EndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Interest expense - corporate debt | $5,602 | $4,732 | $17,491 | $14,058 |
| Interest expense - asset based debt | 2,012 | 1,984 | 6,428 | 6,167 |
| Total interest expense on debt | $7,614 | $6,716 | $23,919 | $20,225 |
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 September 30, 2024 | |
|---|---|
| Remainder of 2024 | $— |
| 2025 | 69,679 |
| 2026 | 67,159 |
| 2027 | 100,000 |
| 2028 | — |
| 2029 and thereafter | 160,000 |
| Total | $396,838 |
The following narrative is a summary of certain terms of our debt agreements for the nine months ended September 30, 2024:
Corporate Debt
Secured Revolving Credit Agreements
As of September 30, 2024 and December 31, 2023, a total of $100,000 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 September 30, 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 September 30, 2024 and December 31, 2023, a total of $67,159 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 September 30, 2024, our mortgage business hadthree warehouse lines of credit with three separate lending partners totaling $105,000 of borrowing capacity. The $50,000 line of credit matures in August 2025, the $25,000 line of credit matures in June 2025, and the $30,000 line of credit matures in February 2025. As of September 30, 2024 and December 31, 2023, a total of $69,679 and $54,350, respectively, was outstanding under such financing agreements.
Mortgage Servicing Rights (MSR) Line of Credit
As of September 30, 2024, our mortgage business had a MSR line of credit totaling $10,000 of borrowing capacity at 3.30% over SOFR, withno borrowings outstanding at the end of the period.
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