TIPTREE INC.TIPT
TIPTREE INC. Debt Disclosure
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 December 31, 2024 | |||||||||||||||||
| Corporate debt | Insurance | Mortgage | Total | ||||||||||||||
Secured revolving credit agreements (1) | $ | — | $ | — | $ | — | |||||||||||
Preferred trust securities (SOFR + 4.10% + spread adjustment (2)) | 35,000 | — | 35,000 | ||||||||||||||
8.50% Junior subordinated notes | 125,000 | — | 125,000 | ||||||||||||||
9.25% Junior subordinated notes | 150,000 | — | 150,000 | ||||||||||||||
| Total corporate debt | 310,000 | — | 310,000 | ||||||||||||||
| Asset based debt | |||||||||||||||||
Asset based revolving financing (SOFR + 2.75%) | 63,699 | — | 63,699 | ||||||||||||||
Residential mortgage warehouse borrowings (1.75% to 3.30% over SOFR) (3)(4) | — | 68,394 | 68,394 | ||||||||||||||
| Total asset based debt | 63,699 | 68,394 | 132,093 | ||||||||||||||
| Total debt, face value | 373,699 | 68,394 | 442,093 | ||||||||||||||
| Unamortized deferred financing costs | (14,957) | (47) | (15,004) | ||||||||||||||
| Total debt, net | $ | 358,742 | $ | 68,347 | $ | 427,089 | |||||||||||
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) (3)(4) | — | 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 December 31, 2024 and 2023 was SOFR + 1.50%.
(2) Previously based on 3-month LIBOR, now SOFR plus the tenor spread adjustment of 0.26%, in accordance with the Adjustable Interest Rate (LIBOR) Act of 2021.
(3) As of December 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% 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%. The balance credit rate on the $50,000 line of credit was 25 basis points lower than the floor.
(4) The weighted average coupon rate for residential mortgage warehouse borrowings was 6.25% and 7.15% at December 31, 2024 and 2023, respectively.
The following table presents the amount of interest expense the Company incurred on its debt for the following periods:
| For the Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 | 2022 | |||||||||||||||
Interest expense - corporate debt | $ | 24,145 | $ | 19,531 | $ | 19,290 | |||||||||||
Interest expense - asset based debt | 8,103 | 8,161 | 10,950 | ||||||||||||||
Total interest expense on debt | $ | 32,248 | $ | 27,692 | $ | 30,240 | |||||||||||
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 December 31, 2024 | |||||
| 2025 | $ | 68,394 | |||
| 2026 | 63,699 | ||||
| 2027 | — | ||||
| 2028 | — | ||||
| 2029 | — | ||||
| 2030 and thereafter | 310,000 | ||||
| Total | $ | 442,093 | |||
The following narrative is a summary of certain terms of our debt agreements for the year ended December 31, 2024:
Corporate Debt
Secured Revolving Credit Agreements
As of December 31, 2024, no borrowings were outstanding as compared to $130,000 outstanding under the revolving line of credit in our insurance business as of December 31, 2023. The maximum borrowing capacity under the agreements as of December 31, 2024 and 2023 was $200,000.
On October 21, 2022, a subsidiary of Fortegra entered into a Second Amended and Restated Credit Agreement by and among Fortegra, and its subsidiary, LOTS Intermediate Co., as borrowers, the lenders from time to time party thereto, certain of Fortegra’s subsidiaries, as guarantors, and Fifth Third Bank, National Association, as the administrative agent and issuing lender (the “Fortegra Credit Agreement”). The Fortegra Credit Agreement provides for a $200,000 revolving credit facility, all of which is available for the issuance of letters of credit, with a sub-limit of $25,000 for swing loans and matures on October 1, 2027.
Junior Subordinated Notes
On October 16, 2017, a subsidiary of Fortegra issued $125,000 of 8.50% Fixed Rate Resetting Junior Subordinated Notes due October 2057 (the “2017 Notes”). Substantially all of the net proceeds were used to repay the existing secured credit agreement at that time, which was terminated thereafter. Beginning on October 15, 2027, the Company may redeem the 2017 Notes at par plus accrued and unpaid interest.
On November 7, 2024, Fortegra issued $150,000 of 9.25% Fixed Rate Resetting Junior Subordinated Notes due November 2064 (the “2024 Notes”). The proceeds of the 2024 Notes were used to repay outstanding indebtedness under the Company’s credit agreement, for insurance company growth capital and general corporate purposes. Beginning on November 15, 2029, the Company may redeem the 2024 Notes at par plus accrued and unpaid interest.
Each of the 2017 Notes and 2024 Notes are unsecured obligations of the issuer and rank in right of payment and upon liquidation, junior to all of the issuer’s current and future senior indebtedness. The 2017 Notes and 2024 Notes are pari passu with each other. Each of the 2017 Notes and 2024 Notes are guaranteed jointly and severally by certain subsidiaries of Fortegra and Fortegra is a guarantor of the 2017 Notes. So long as no event of default has occurred and is continuing, all or part of the interest payments on the 2017 Notes and 2024 Notes can be deferred on one or more occasions for up to consecutive years per deferral period. The 2017 Notes and 2024 Notes contain customary financial covenants that require, among other items, maximum leverage and limitations on restricted payments under certain circumstances.
Preferred Trust Securities
On June 20, 2007, a subsidiary of Fortegra issued $35,000 of preferred trust securities due June 15, 2037. Interest is payable quarterly at an interest rate of SOFR plus 4.10% plus a spread adjustment (previously, LIBOR plus 4.10%). The Company may redeem the preferred trust securities, in whole or in part, at a price equal to the full outstanding principal amount of such preferred trust securities outstanding plus accrued and unpaid interest.
Asset Based Debt
Asset Based Revolving Financing
On October 16, 2020, subsidiaries of Fortegra entered into a three year $75,000 secured credit agreement, which replaced the individual agreements in its premium finance and warranty service contract finance businesses. The borrowers can select from various borrowing and rate options under the agreement, as well the option to convert certain borrowings to term loans, if no default or event of default exists. The agreement extends up to $20,000 for the Company’s premium finance business and up to $55,000 for its warranty service contract finance business, and is secured by substantially all of the assets of the borrowers thereunder. The obligations under the agreement are non-recourse to The Fortegra Group and its subsidiaries (other than the borrowers and their subsidiaries). On January 31, 2023, subsidiaries of Fortegra amended the asset based revolving financing to increase the revolving commitment to $100,000 and transition to SOFR.
On October 6, 2023, subsidiaries of Fortegra entered into a three-year $125 million secured credit agreement that amends and restates the prior credit agreement dated October 16, 2020. The agreement extends the maturity date of the revolving credit facility from October 2023 to October 2026 and increases the total revolving credit commitments from $100 million to $125 million.
As of December 31, 2024 and 2023, a total of $63,699 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 December 31, 2024, our mortgage business had three 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 December 31, 2024 and 2023, a total of $68,394 and $54,350, respectively, was outstanding under such financing agreements.
Mortgage Servicing Rights (MSR) Line of Credit
As of December 31, 2024, our mortgage business had a MSR line of credit totaling $10,000 of borrowing capacity at 3.30% over SOFR, with no borrowings outstanding at the end of the period.
Vessel-Backed Term Loan
The remaining balance of the vessel backed term loan totaling $13,050 was fully repaid at a discount during May 2022, for a net gain of $1,168 during the year ended 2022.
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.