Business Context and Reporting Period
Chimera Investment Corporation filed a Form 8-K Current Report dated January 31, 2008. The filing discloses the entry into a material definitive agreement to establish a new financing facility.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or existing debt levels. The primary financial metric disclosed is the establishment of a new committed lending facility.
- New Facility Size: $350 million
- Facility Type: Master Repurchase Agreement (Repurchase Facility)
- Counterparties: DB Structured Products, Inc. and Deutsche Bank Securities Inc.
- Interest Rate Structure: LIBOR plus a variable number of basis points based on collateral type.
- Termination Date: January 29, 2010
Material Changes
The material change reported is the execution of the $350 million repurchase agreement on January 31, 2008. This agreement allows the Company to sell mortgage loans or residential mortgage-backed securities to the counterparties for a purchase price based on market value percentages or outstanding principal, with an obligation to repurchase the assets at the original price plus accrued interest.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future performance, or specific risk factors beyond the standard covenants required by the agreement. The agreement requires the Company to maintain certain routine covenants and standard representations and warranties during the term.
Investor Verification Checklist
- Verify the specific basis point spreads over LIBOR for different collateral types in the full text of Exhibit 10.1.
- Confirm the exact haircuts (percentage of market value) applied to the purchase price for various mortgage loan and security types.
- Review the specific routine covenants required to maintain the facility.
- Assess the impact of this new $350 million facility on the Company's overall leverage and liquidity position relative to its November 2007 IPO.