Business Context and Reporting Period
Chimera Investment Corporation filed this Form 8-K on January 18, 2008, to report the entry into a material definitive agreement. The Company is a Maryland corporation focused on mortgage lending.
Key Financial Metrics and Agreement Details
The filing details a new master repurchase agreement (repurchase facility) with Credit Suisse First Boston Mortgage Capital LLC (CSFB). Key terms include:
- Total Facility Size: $500 million.
- Committed Portion: $300 million.
- Uncommitted Portion: $200 million (subject to CSFB approval for loans exceeding the committed amount).
- Interest Rate: LIBOR plus a variable number of basis points depending on loan type.
- Term: Terminates on January 16, 2009.
- Collateral: Mortgage loans sold to CSFB at a price based on market value percentages or outstanding principal.
The filing does not provide specific revenue, profit, cash flow, margin, or existing debt figures for the Company.
Material Changes
This filing represents a material change in the Company's capital structure and liquidity sources, establishing a new $500 million lending facility shortly after its November 2007 initial public offering. CSFB is an affiliate of one of the IPO underwriters.
Outlook, Risks, and Contingencies
The agreement requires the Company to maintain routine covenants and standard representations and warranties. The uncommitted portion of the facility introduces a contingency where funding for loans above $300 million is not guaranteed and requires lender approval. The filing does not contain specific management guidance or outlook statements beyond the terms of this agreement.
Investor Verification Checklist
- Verify the specific basis point spreads over LIBOR for different mortgage loan types.
- Confirm the exact market value percentages used to determine the purchase price of collateral.
- Review the specific routine covenants required under the agreement (detailed in Exhibit 10.1).
- Assess the Company's current leverage ratio post-agreement execution.