Company: TWO-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001465740-25-000104
Chunk: 243

Company: TWO HARBORS INVESTMENT CORP.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 2
Chunk 243
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 organizations, and we attempt to manage our cash balances across these organizations to reduce our exposure to any single counterparty.

As of March 31, 2025, we had entered into repurchase agreements with 33 counterparties, 19 of which had outstanding balances. In addition, we held short- and long-term borrowings under revolving credit facilities, warehouse facilities and unsecured convertible senior notes. As of March 31, 2025, the debt-to-equity ratio funding our Agency and non-Agency investment securities, MSR and related servicing advances and mortgage loans held-for-sale, which includes unsecured borrowings under convertible senior notes, was 5.1:1.0.

As of March 31, 2025, we held $573.9 million in cash and cash equivalents, approximately $5.4 million of unpledged Agency RMBS and $3.3 million of unpledged non-Agency securities. As a result, we had an overall estimated unused borrowing capacity on our unpledged securities of approximately $6.5 million. As of March 31, 2025, we held approximately $2.6 million of unpledged MSR and $1.8 million of unpledged servicing advances. Overall, on March 31, 2025, we had $170.1 million unused committed and $780.0 million unused uncommitted borrowing capacity on MSR financing facilities, and $46.7 million in unused committed borrowing capacity on servicing advance financing facilities. As of March 31, 2025, we held approximately $0.3 million of unpledged mortgage loans and had $19.1 million unused committed borrowing capacity on our warehouse facilities. Generally, unused borrowing capacity may be the result of our election not to utilize certain financing, as well as delays in the timing in which funding is provided, insufficient collateral or the inability to meet lenders’ eligibility requirements for specific types of asset classes. 

We also monitor exposure to our MSR counterparties. We may be required to make representations and warranties to investors in the loans underlying the MSR we own; however, some of our MSR were purchased on a bifurcated basis, meaning the representation and warranty obligations remain with the seller. If the representations and warranties we make prove to be inaccurate, we may be obligated to repurchase certain mortgage loans, which may impact the profitability of our portfolio. Although we obtain similar representations and warranties from the counterparty from which we acquired the relevant asset, if those representations and warranties do not directly