Angel Oak Mortgage REIT, Inc.AOMR
Angel Oak Mortgage REIT, Inc. Debt Disclosure
Financing
The Company has the ability to finance residential whole loans and lines of credit and commercial whole loans, utilizing lines of credit (notes payable) from various counterparties, as further described below. Outstanding borrowings bear interest at floating rates depending on the lending counterparty, the collateral pledged, and the rate in effect for each interest period, as the same may change from time to time at the end of each interest period. Some loans include upfront fees, exit or withdrawal fees, covenants and concentration limits on types of collateral pledged, many of which vary based on the counterparty. Occasionally, a lender may require certain margin collateral to be posted on a warehouse line of credit. There was no margin collateral required as of December 31, 2024 or December 31, 2023.
The following table sets forth the details of all the lines of credit available to the Company for whole loan purchases during the years ended December 31, 2024 and 2023, and the drawn amounts as of December 31, 2024 and 2023:
Interest Rate Pricing Spread | Drawn Amount | |||||||||||||||||||||||||
Note Payable | Base Interest Rate | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||
Multinational Bank 1 (1) | Average Daily SOFR | 1.75% - 2.10% | $ | 100,711 | $ | 206,183 | ||||||||||||||||||||
Global Investment Bank 2 (2) | 1 month SOFR | 1.75% - 3.35% | 15,111 | — | ||||||||||||||||||||||
Global Investment Bank 3 (3) | Compound SOFR | 1.90% - 4.75% | 13,637 | 84,427 | ||||||||||||||||||||||
| Total | $ | 129,459 | $ | 290,610 | ||||||||||||||||||||||
(1) On June 24, 2024 this facility was amended with an updated interest pricing spread range of 1.75% and 2.10% and extended until December 26, 2024. On December 23, 2024, the loan financing facility was extended through June 25, 2025, in accordance with the mechanism for six-month renewal periods.
(2) On March 28, 2024, the Company and two of its subsidiaries terminated the existing facility with Global Investment Bank 2 and the Company and two different subsidiaries entered into a new facility with Global Investment Bank 2 wherein the Company is guarantor, one of the subsidiaries is seller and Global Investment Bank 2 is buyer, with an original maximum facility limit of $250.0 million. In connection with the execution of the new facility the interest rate pricing spread was reduced to a range between 2.10% and 3.35%. On October 25, 2024, the facility was amended to, among other changes, reduce the pricing spread to a range between 1.75% and 3.35%.
(3) On November 7, 2023, this facility was renewed for a 12 month term through November 7, 2024 with a maximum borrowing capacity of $200 million and a base interest rate pricing spread of 180 basis points plus a 20 basis points index spread adjustment for the first (6) months of dwell time, with an expiration date of November 7, 2024. On November 1, 2024, the facility’s termination date was extended to November 1, 2025. In addition, the base interest rate spread was reduced to a range from 1.90% to 4.75% and the index spread adjustment of 20 basis points was eliminated.
The following table sets forth the total unused borrowing capacity of each financing line as of December 31, 2024:
| Line of Credit (Note Payable) | Borrowing Capacity | Balance Outstanding | Available Financing | |||||||||||||||||
| (in thousands) | ||||||||||||||||||||
Multinational Bank 1 | $ | 600,000 | $ | 100,711 | $ | 499,289 | ||||||||||||||
Global Investment Bank 2 | 250,000 | 15,111 | 234,889 | |||||||||||||||||
Global Investment Bank 3 | 200,000 | 13,637 | 186,363 | |||||||||||||||||
| Total | $ | 1,050,000 | $ | 129,459 | $ | 920,541 | ||||||||||||||
Although available financing is uncommitted for each of these lines of credit, the Company’s unused borrowing capacity is available if it has eligible collateral to pledge and meets other borrowing conditions as set forth in the applicable agreements.
Senior Unsecured Notes
On July 25, 2024, the Company closed an underwritten public offering and sale of, and issued, $50 million in aggregate principal amount of its 9.500% Senior Notes due 2029 (the “Notes”). The Notes bear interest at a rate of 9.500% per annum, payable quarterly in arrears on January 30, April 30, July 30 and October 30 of each year. The Notes will mature on July 30, 2029, unless earlier redeemed or repurchased by the Company and are held at amortized cost. After deducting the underwriting discount and other debt issuance costs, the Company received net proceeds of approximately $48.4 million.
The Company may redeem the Notes in whole or in part at any time or from time to time at its option on or after July 30, 2026 at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Upon the occurrence of certain events relating to a change of control of the Company, the Company must make an offer to repurchase all outstanding Notes at a price in cash equal to 101% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the repurchase date.
The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Operating Partnership, including the due and punctual payment of principal of, premium, if any, and interest on the Notes, whether at stated maturity, upon acceleration, call for redemption or otherwise.
At December 31, 2024, the outstanding principal amount of these notes was $50 million and the accrued interest payable on the Notes was $0.8 million. At December 31, 2024, the unamortized deferred debt issuance cost was $1.4 million, and the net interest expense
recognized in 2024 was $2.2 million. The unamortized deferred debt issuance costs will be amortized until maturity, which will be no later than July 30, 2029. There were no Notes as of December 31, 2023.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.