Vulture fund PennyMac Mortgage Investment Trust last week entered into a $125 million repurchase agreement with Citibank, N.A., according to a new public filing.
The financing vehicle deal was inked around the same time that Citigroup agreed to sell a $441 million package of nonperforming mortgages to PennyMac, a publicly traded REIT with affiliates that service and originate loans. (Both Citi and PennyMac have declined to comment on the NPL sale, which was first reported by ASR's sister publication National Mortgage News.)
Under the facility, two of PennyMac's subsidiaries (PennyMac Mortgage Investment Trust Holdings I, LLC, and PennyMac Corp.) may sell, and later repurchase, distressed residential mortgage loans.
The CitiBank "NPL Facility" (as it's called in an SEC filing) is committed for a period of 364 days "and the obligations of these subsidiaries are fully guaranteed" by the parent company.
The deal requires that PennyMac maintain a minimum tangible net worth of $300 million.